Balfour Beatty Share Price Soars to 2008 Highs: More Upside?

Summary:
• The Balfour Beatty share price surged to 365p, the highest point since 2008. We explain whether the stock is still a buy.

Infrastructure companies have had a mixed performance in the past few years. While demand for their work has risen, the companies have contended with thin margins as the cost of doing business rose. They are also dealing with rising wages as a labor shortage intensifies. Nonetheless, publicly traded companies like AECOM, MasTec, and Balfour Beatty (LON: BBY) shares have soared. The Balfour Beatty share price surged to 365p, the highest point since 2008.

Why is BBY stock surging?

Balfour Beatty is an infrastructure company that many people in the UK have never heard about. But it is one that a large part of the population has interacted with its products. It is the second-biggest government contractor in the UK after Amey. Over the years, the company has built some of the best-known projects in the country like Swanswell Viaduct in Coventry, Stockingfield Bridge in Glasgow, and Silver Jubilee Bridge.

Balfour Beatty share price got supercharged this week after the company won a major 1.2 billion contract to build the ‘Roads North of the Thames’ project. The contract was awarded by National Highways. Balfour will be involved in the entire process of designing and constructing the project. In a statement, the firm said:

“Our deep domain knowledge and long-standing history in complex road construction, acquired through many years of successful delivery on behalf of National Highways, makes us ideally positioned to deliver this project to the highest standard.”

Balfour Beatty share price analysis

Balfour Beatty stock has continued to defy gravity in the past few months. It December, it successfully moved above the key resistance level at 327p, the highest point in April 2021. Previous attempts to cross that level faced resistance. And this year, the shares moved above 346p, thus invalidating the double-top pattern that was forming. Its neckline was at 285p.

It is also worth noting that the recovery of the stock happened after the shares made an inverted head and shoulders pattern that lasted over a year to complete. The shares are still being supported by the 50-day volume-weighted moving average (VWMA). Therefore, I believe that the stock has some more upside going forward. If this happens, the next key level to watch will be at 409p. This price is derived from calculating the distance between the double-top and the neckline.