Market Underestimating Martin Marietta

We’re raising narrow-moat

Despite the significant impact on third-quarter performance from hurricanes Harvey and Irma, Martin Marietta generated record EBITDA for 2017 of more than $1 billion. Although this represents just 3% growth from 2016, it’s notable since aggregates shipments actually fell 1% from the prior year due to the weather. In spite of weather holding back volumes, companywide pricing still rose 4.5% over the prior year and gross margin expanded by about 70 basis points.

Looking ahead to 2018, Martin Marietta expects modest growth across all of its end markets, driving guidance of 4% to 6% volume growth and 3% to 5% pricing growth for aggregates. We’re forecasting continued mid-single-digit volume growth through 2022 as construction demand continues to strengthen. In turn, this should help the company push through mid-single-digit pricing increases across its footprint, helping drive gross margins higher through the forecast period.

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