Martin Marietta Materials: An Overview of Recent Performance and Outlook
As a major player in the construction industry, Martin Marietta Materials, Inc. (MLM) has a market capitalization of $36.4 billion. This company, based in North Carolina, provides crucial building materials such as crushed stone, sand, gravel, ready-mixed concrete, asphalt, and specialty cement.
Recent Stock Performance Analysis
Over the past year, MLM has struggled when compared to the broader market. While its stock has increased by 27.9%, the S&P 500 Index ($SPX) has outperformed with a rise of 31.8%. Year-to-date, shares are up 19.4%, trailing behind the SPX’s gains of 25.8%.
Narrowing the view further, MLM has still managed to surpass the Materials Select Sector SPDR Fund’s (XLB) growth of 16.4% over the past 52 weeks, as well as a YTD return of 10.2%.
Earnings Report Reveals Challenges
On October 30, MLM released its Q3 earnings, highlighting a 15% year-over-year decline in adjusted earnings per share (EPS) to $5.91, which was below consensus estimates of $6.41. Revenue also dipped by 5.3% from last year to $1.89 billion, missing Wall Street’s forecast of $1.92 billion.
These disappointing results were largely due to severe weather events, such as hurricanes, affecting product shipments and geographical operations. In response to these challenges, MLM has revised its full-year guidance downward. Notably, shares rose by 3.6% on the earnings announcement day but faced declines in the two trading days that followed.
Future Expectations and Analyst Insights
Looking ahead to the current fiscal year ending in December, analysts project an EPS decline of 9% to $17.58. The company’s history of earnings surprises is varied, having exceeded estimates in two of the last four quarters while falling short in the other two.
Among the 17 analysts covering MLM, there is strong confidence reflected in a consensus rating of “Strong Buy,” with 12 rating it as a “Strong Buy,” two as “Moderate Buy,” and three as “Hold.”
This positive sentiment has shifted considerably in the past three months, with nine analysts previously suggesting a “Strong Buy.”
On November 27, JPMorgan upgraded MLM to an “Overweight” rating and adjusted its price target to $640, implying a potential upside of 7.4% from current prices. The average price target sits at $647.32, suggesting an 8.7% upside potential, while the highest target of $730 indicates a significant upside of 22.6%.
On the date of publication, Neharika Jain did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information, please view the Barchart Disclosure Policy here.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
