Martin Marietta Earnings: Severe Weather Constrains Construction and Demand for Aggregates

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.