SUPP Overview

• Market Overview: US stocks closed lower on Tuesday amid ongoing market volatility driven by macro-level uncertainties, with TCW's Jennifer Grancio discussing investment strategies focused on megatrends like artificial intelligence and reshoring.

• Investment Focus: Grancio emphasized the importance of investing in quality companies within the AI sector and highlighted specific ETFs such as the TCW Artificial Intelligence ETF and others targeting supply chain trends.

• Financial Performance: Martin Marietta Materials Inc reported a 1% year-over-year revenue increase to $1.632 billion for Q4, missing expectations, while gross profit remained flat at $489 million. Despite challenges in construction demand and weather, the company achieved record fourth-quarter profits and expects revenue growth in 2025.

• Stock Market Reaction: Following the earnings report, MLM shares fell by 2.08% to $518.00 in premarket trading, reflecting investor concerns despite positive adjusted EBITDA and EPS results that exceeded consensus estimates.

• Financial Performance: Trane Technologies reported a 10% year-over-year revenue growth to $4.87 billion in Q4, exceeding expectations, with adjusted EPS rising 20% to $2.61 and a backlog of $6.75 billion.

• Future Outlook: The company anticipates organic revenue growth of 7%-8% for FY25 and plans to deploy all excess cash to shareholders, having committed $2.5 billion in capital in 2024.

• Financial Performance: Martin Marietta Materials Inc reported a 3% year-over-year revenue decline to $1.764 billion for Q2 FY24, missing expectations, with adjusted EPS also falling short at $5.26 compared to the consensus of $5.40. The company lowered its 2024 revenue and EBITDA guidance due to factors affecting product shipments.

• Market Conditions: CEO Ward Nye attributed the decline to historic weather conditions and restrictive monetary policies impacting construction demand, but expressed optimism that the current softness in private construction will be short-lived, supported by anticipated improvements in inflation and employment data.

RBC Capital's Walter Spracklin upgraded Norfolk Southern to Outperform with a $270 price target.

Spracklin projects a 20% EPS CAGR from 2024-2027, with EPS estimates of $11.74 for FY24, $14.74 for FY25, and $17.55 for FY26.