Martin Marietta Materials (MLM) PT Lowered to $615 at Loop Capital

Loop Capital analyst Garik Shmois lowered the price target on Martin Marietta Materials (NYSE: MLM) to $615.00 (from $630.00) while maintaining a Buy rating.

The analyst commented: "MLM's results and guidance cut shouldn't have been so surprising considering expectations were meaningfully lowered throughout the quarter mostly on weather concerns. VMC's print earlier last week also offered additional insights into how MLM's would go. There were some notable company specific details with about half of MLM's volume weakness in the quarter related to weather, a quarter related to MLM's value vs. volume strategy (ie. maximizing price at the expense of volume) and the remaining third coming from weaker end market demand. Cost inflation was also higher than anticipated, but this was largely related to inventory purchase accounting. Excluding this, gross margin was actually solid as lower energy related costs offset higher items like labor and insurance. Lastly, MLM did keep its pricing guidance, but mix was a modest headwind as the company integrates the AFS and BWI deals. This should reverse at some point. The good news is that MLM, like VMC, re-set the bar appropriately lower with its new guidance. The back-half outlook incorporates a slow start to 3Q as poor weather is raining havoc on volumes through early August. Looking to FY25, we still see HSD pricing as contributing to solid earnings growth, and as a result, we remain BUY rated following the recent pull back in the shares. However, our PT comes down $15 to $615 and is based on 17.5x our new FY25E EBITDA forecast."

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