Company Reports

We are transferring coverage of US building materials companies Vulcan Materials, Martin Marietta, and Amrize. The companies produce aggregates, cement, ready-mix concrete, and other building materials used across infrastructure, nonresidential, and residential construction.

Martin Marietta is a leading producer of construction aggregates in the US, with smaller exposure to cement and downstream products such as ready-mix concrete and asphalt. The company operates across 28 US states, with additional operations in Canada and the Bahamas.

Martin Marietta reported second-quarter sales growth of 21% year over year, but stripping out acquisitions and 3.7% price increases reveals 2.3% organic volume growth. The firm announced the purchase of Lhoist North America on June 27, paying $13.5 billion in enterprise value.

Martin Marietta is well positioned to benefit from increased US infrastructure spending. Although mainly an aggregates producer, the company also has cement production in Texas. We forecast strengthening demand growth for the public sector and modest growth for the private sector. Accounting for roughly half of shipments, public-sector demand is generally more stable, and projects, primarily highway construction, are more aggregate-intensive per dollar of spending. However, in recent years, this sector's demand has been low relative to historical levels amid underfunding that has led to worsening conditions. Federal funding power has weakened over time, as better vehicle mileage and inflation have diminished the buying power of the $0.18 per gallon gasoline tax, unchanged since 1993. The FAST Act, passed in December 2015, provided stability and near-term funding certainty, but did not solve the still-weakening gas tax. However, long-term federal funding was passed in late 2021, totaling $1.2 trillion.

Martin Marietta reported first-quarter sales growth of 17% year over year, but outsize growth in lower-margin Central and West divisions caused gross profits to decline. Additionally, the firm announced the completion of its asset exchange with Quikrete and the acquisition of New Frontier Materials.

Martin Marietta reported fourth-quarter sales growth of 9% year over year. Over the full year, sales also grew 9%, driven by strength in the firm's aggregates business.

Martin Marietta increased its revenue 12% and its earnings per share 16% year over year. Results were bolstered by strength in the firm's aggregates business.

Martin Marietta is well positioned to benefit from increased US infrastructure spending. Although mainly an aggregates producer, the company also has cement production in Texas. We forecast strengthening demand growth for the public sector and modest growth for the private sector. Accounting for roughly half of shipments, public-sector demand is generally more stable, and projects, primarily highway construction, are more aggregate-intensive per dollar of spending. However, in recent years, this sector's demand has been low relative to historical levels amid underfunding that has led to worsening conditions. Federal funding power has weakened over time, as better vehicle mileage and inflation have diminished the buying power of the $0.18 per gallon gasoline tax, unchanged since 1993. The FAST Act, passed in December 2015, provided stability and near-term funding certainty, but did not solve the still-weakening gas tax. However, long-term federal funding was passed in late 2021, totaling $1.2 trillion.

At its investor day, Martin Marietta focused on its aggregates-led business model and its attractive growth prospects in its four regions. Martin Marietta noted the success of its SOAR 2025 program and provided updates to its SOAR 2030 targets.

Martin Marietta is well positioned to benefit from increased US infrastructure spending. Although mainly an aggregates producer, the company also has cement production in Texas. We forecast strengthening demand growth for the public sector and modest growth for the private sector. Accounting for roughly half of shipments, public-sector demand is generally more stable, and projects, primarily highway construction, are more aggregate-intensive per dollar of spending. However, in recent years, this sector's demand has been low relative to historical levels amid underfunding that has led to worsening conditions. Federal funding power has weakened over time, as better vehicle mileage and inflation have diminished the buying power of the $0.18 per gallon gasoline tax, unchanged since 1993. The FAST Act, passed in December 2015, provided stability and near-term funding certainty, but did not solve the still-weakening gas tax. However, long-term federal funding was passed in late 2021, totaling $1.2 trillion.

Martin Marietta is well positioned to benefit from increased US infrastructure spending. Although mainly an aggregates producer, the company also has cement production in Texas. We forecast strengthening demand growth for the public sector and modest growth for the private sector. Accounting for roughly half of shipments, public-sector demand is generally more stable, and projects, primarily highway construction, are more aggregate-intensive per dollar of spending. However, in recent years, this sector's demand has been low relative to historical levels amid underfunding that has led to worsening conditions. Federal funding power has weakened over time, as better vehicle mileage and inflation have diminished the buying power of the $0.18 per gallon gasoline tax, unchanged since 1993. The FAST Act, passed in December 2015, provided stability and near-term funding certainty, but did not solve the still-weakening gas tax. However, long-term federal funding was passed in late 2021, totaling $1.2 trillion.

Net sales for Martin Marietta rose almost 3% in the second quarter compared with a year ago, mainly driven by a 7.5% increase in aggregates pricing and contributions from acquisitions despite a decline in aggregates shipments.

Martin Marietta is well positioned to benefit from increased US infrastructure spending. Although mainly an aggregates producer, the company also has cement production in Texas. We forecast strengthening demand growth for the public sector and modest growth for the private sector. Accounting for roughly half of shipments, public-sector demand is generally more stable, and projects, primarily highway construction, are more aggregate-intensive per dollar of spending. However, in recent years, this sector's demand has been low relative to historical levels amid underfunding that has led to worsening conditions. Federal funding power has weakened over time, as better vehicle mileage and inflation have diminished the buying power of the $0.18 per gallon gasoline tax, unchanged since 1993. The FAST Act, passed in December 2015, provided stability and near-term funding certainty, but did not solve the still-weakening gas tax. However, long-term federal funding was passed in late 2021, totaling $1.2 trillion.

Narrow-moat-rated Martin Marietta Materials reported strong first-quarter results that were ahead of our expectations. Net sales rose over 8% year over year due to robust growth in the company’s aggregates and asphalt businesses. Martin Marietta continues to execute well, driving price growth across much of its portfolio despite choppy end-market demand. Higher interest rates continue to weigh on private construction end-markets, with residential construction faring worse. That said, data centers remain a bright spot, a trend that we expect will persist at least through the end of the year. Infrastructure spending from the 2021 infrastructure bill remains strong and continues to boost shipments. Nevertheless, some uncertainty remains as tariffs and higher interest rates could have an adverse effect on private sector construction spending this year, which would likely weigh heavily on shipments. Still, we expect robust infrastructure spending will support shipments this year.

Narrow-moat-rated Martin Marietta Materials reported solid fourth-quarter results that were largely in line with our expectations. Net sales rose 1.5% year over year as strong growth in aggregates was offset by declines in the cement business, mainly due to the impact of divestitures. Higher interest rates continue to be a challenge for Martin Marietta as residential and light commercial construction demand remains muted. That said, the company continues to benefit from infrastructure demand due to spending from the 2021 infrastructure bill as well as some other private-construction end markets, such as data centers. While risks of a prolonged downturn in residential and private construction markets remains, we expect infrastructure spending will buoy Martin Marietta's aggregate shipments in 2025. We have increased our fair value estimate to $380 per share from $370 due to the time value of money.

Martin Marietta is well positioned to benefit from increased US infrastructure spending. Although mainly an aggregates producer, the company also has cement production in Texas. We forecast strengthening demand growth for the public sector and modest growth for the private sector. Accounting for roughly half of shipments, public-sector demand is generally more stable, and projects, primarily highway construction, are more aggregate-intensive per dollar of spending. However, in recent years, this sector's demand has been low relative to historical levels amid underfunding that has led to worsening conditions. Federal funding power has weakened over time, as better vehicle mileage and inflation have diminished the buying power of the $0.18 per gallon gasoline tax, unchanged since 1993. The FAST Act, passed in December 2015, provided stability and near-term funding certainty, but did not solve the still-weakening gas tax. However, long-term federal funding was passed in late 2021, totaling $1.2 trillion.

Narrow-moat-rated Martin Marietta Materials navigated significant weather events during the third quarter, which affected results across its portfolio. Net sales declined 5.3% year over year, mainly due to weather-related shipment delays and offsetting effects from the divestiture of the company’s south Texas business and the acquisition of 20 aggregates operations from Blue Water earlier this year. Construction end markets continue to navigate higher interest rates, with residential constriction faring worst in the quarter. Storms and hurricanes had significant effects across the company’s network during the quarter, but we expect much of the delayed shipments will be pushed for the fourth quarter or early next year. As such, we maintain our $370 fair value estimate.

Martin Marietta is well positioned to benefit from increased US infrastructure spending. Although mainly an aggregates producer, the company also has cement production in Texas. We forecast strengthening demand growth for the public sector and modest growth for the private sector. Accounting for roughly half of shipments, public-sector demand is generally more stable, and projects, primarily highway construction, are more aggregate-intensive per dollar of spending. However, in recent years, this sector's demand has been low relative to historical levels amid underfunding that has led to worsening conditions. Federal funding power has weakened over time, as better vehicle mileage and inflation have diminished the buying power of the $0.18 per gallon gasoline tax, unchanged since 1993. The FAST Act, passed in December 2015, provided stability and near-term funding certainty, but did not solve the still-weakening gas tax. However, long-term federal funding was passed in late 2021, totaling $1.2 trillion.

Narrow-moat-rated Martin Marietta reported underwhelming second-quarter results as unfavorable weather weighed on aggregate volumes. Net sales fell roughly 3% year over year as divestitures of the company’s south Texas cement and concrete assets were offset by the acquisition of 20 aggregates operations from Blue Wade earlier this year. Higher interest rates continue to constrain construction end markets, with warehouses, light commercial, and multifamily construction faring worst. That said, some end markets, such as data centers and energy-related projects, are still experiencing solid growth and have buoyed demand for aggregates. Martin Marietta and its competitors also have the benefit of ramping infrastructure spending, as we expect infrastructure projects will continue to ramp through 2025, driving demand for aggregates in many markets. We have decreased our fair value estimate to $370 per share from $380 due to a slight decline in our near-term revenue forecast.

Martin Marietta is well positioned to benefit from increased US infrastructure spending. Although mainly an aggregates producer, the firm also has cement production in Texas. We forecast strengthening demand growth for the public sector and modest growth for the private sector. Accounting for roughly half of shipments, public-sector demand is generally more stable, and projects, primarily highway construction, are more aggregate-intensive per dollar of spending. However, in recent years, this sector's demand has been low relative to historical levels amid underfunding that has led to worsening conditions. Federal funding power has weakened over time, as better vehicle mileage and inflation have diminished the buying power of the $0.18 per gallon gasoline tax, unchanged since 1993. The FAST Act, passed in December 2015, provided stability and near-term funding certainty, but did not solve the still-weakening gas tax. However, long-term federal funding was passed in late 2021, totaling $1.2 trillion.