Research · Sep 3, 2026
[ASTE] Astec Industries Thesis 2026: IIJA Road Spending Meets Operational Turnaround at Trough Margins
Astec's FY2025 showed the first clear turnaround signals under CEO van der Merwe: gross margin recovered to ~21% from the 16.9% FY2023 trough, adj. EBITDA ~$92M at ~8.7%, and orders stabilizing at ~$1.05B (book-to-bill ~1.0x). The FY2026 thesis: ~$65B of remaining IIJA road/bridge spending obligating through FY2028 drives Infrastructure Solutions order recovery toward $1.2-1.4B, while factory consolidation and pricing discipline deliver 12-14% EBITDA margins — a combination that could restore EPS toward $3.50-5.00 from the current $1.50 trough.