Martin Marietta Earnings: Pricing Power Drives Robust Margin Expansion; Shares Remain Expensive

Narrow-moat-rated Martin Marietta reported third-quarter results with few surprises. Net sales rose 10% year over year as the company enjoyed strong pricing amid moderating demand for most of its building materials. Aggregate shipments fared worse in the quarter as Martin Marietta navigates a slowdown in new residential construction that has been somewhat offset by heavy nonresidential and infrastructure demand. We expect shipments to remain pressured through the end of the year, but accelerating infrastructure spending should provide some relief in 2024. We've increased our fair value estimate to $325 per share from $323 due to the time value of money.