Makers of construction aggregates are ripe for M&A, Morgan Stanley says
Written by Emily J. Thompson, Senior Investment Analyst
Source: SeekingAlpha
- Aggregates Industry M&A Activity: Analysts at Morgan Stanley predict increased mergers and acquisitions activity in companies providing aggregates like gravel and sand for concrete and asphalt production.
- Fragmented Aggregates Market: The aggregates industry in the United States is fragmented, with over 5,000 companies operating more than 10,000 facilities, creating barriers to entry.
- Financial Strength of Companies: Most aggregates/cement companies have strong balance sheets, with low debt levels and robust cash flow, enabling them to pursue M&A or shareholder returns.
- Preferred Investments: Analysts recommend investments in companies like Martin Marietta Materials, Holcim, Heidelberg Materials, and GCC due to their financial positions and growth strategies.
- Focus on U.S. Construction Themes: Companies like Martin Marietta Materials and Vulcan Materials are actively deploying capital for growth, making U.S. aggregates a preferred exposure to construction themes.
Analyst Views on MLM
Wall Street analysts forecast MLM stock price to rise over the next 12 months. According to Wall Street analysts, the average 1-year price target for MLM is 693.20 USD with a low forecast of 605.00 USD and a high forecast of 758.00 USD. However, analyst price targets are subjective and often lag stock prices, so investors should focus on the objective reasons behind analyst rating changes, which better reflect the company's fundamentals.
11 Analyst Rating
9 Buy
2 Hold
0 Sell
Strong Buy
Current: 652.070
Low
605.00
Averages
693.20
High
758.00
Current: 652.070
Low
605.00
Averages
693.20
High
758.00
About MLM
Martin Marietta Materials, Inc. is a natural resource-based building materials company. The Company supplies aggregates (crushed stone, sand and gravel) through its network of approximately 390 quarries, mines and distribution yards in 28 states, Canada and The Bahamas. It also provides cement and downstream products, namely, ready mixed concrete, asphalt and paving services in targeted markets. It conducts its Building Materials business through two segments, organized by geography: East Group and West Group. The East Group provides aggregates and asphalt products. The West Group provides aggregates, cement, downstream products and paving services. The Company’s Magnesia Specialties business provides a full range of magnesium oxide, magnesium hydroxide and dolomitic lime products. Its magnesia-based chemical products are used in industrial, agricultural and environmental applications. It also produces dolomitic lime sold to customers for steel production and soil stabilization.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
