Granite Construction shares lifted by California's infrastructure bill

Granite Construction saw shares jump more than 8 percent Friday, boosted by new California legislation that provides funding to projects that may benefit the company.

Early in the session, shares of Granite Construction were on track for their best day since November, following news of the California transportation bill's passage.

The bill authorizes $52 billion in funding over the next ten years for the California Department of Transportation (Caltran) to use on transportation infrastructure. The bill also provides for $5 billion per year towards highway and transit repair projects.

Nine percent of Granite Construction's revenue came from Caltran last year, Canaccord Genuity analyst Bobby Burleson said in a note to clients. As a result, the new bill is likely to pad their earnings further.

"The incremental opportunity from the additional $5B in annual state funding only furthers our conviction of positive long-term fundamentals for [Granite Construction] and should represent a catalyst for near-term backlog growth and multiple expansion," Burleson said.

As of Friday's close, shares of Granite Construction are up almost 16 percent over the past 12 months. The stock closed up over 8 percent at $53.82 per share.