What Happened?

Shares of energy and construction materials company MDU Resources (NYSE: MDU) jumped 1.8% in the morning session after Jefferies upgraded the stock from Hold to Buy and boosted its price target to $20. 

The investment firm highlighted that MDU's core business presented compelling value, noting the stock traded at a significant discount. The analyst pointed to a strong projected earnings per share growth rate of 6% to 8% annually, which distinguished MDU from its peers. According to the note, issues that followed a previous company spin-off were now in the past, paving a clearer path forward. Jefferies also suggested that a future announcement about the Bakken East Pipeline could serve as a key catalyst, potentially driving a re-rating for the stock.

After the initial pop the shares cooled down to $16.37, up 1.8% from previous close.

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What Is The Market Telling Us

MDU Resources’s shares are not very volatile and have only had 5 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful, although it might not be something that would fundamentally change its perception of the business.

MDU Resources is down 8.8% since the beginning of the year, and at $16.37 per share, it is trading 46% below its 52-week high of $30.28 from October 2024. Investors who bought $1,000 worth of MDU Resources’s shares 5 years ago would now be looking at an investment worth $729.60.

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