MLM - Embedded Expectations Analysis - 2019 12 05
Martin Marietta Materials (MLM:USA) currently trades above corporate averages relative to UAFRS-based (Uniform) Earnings, with a 31.6x Uniform P/E, implying bullish expectations for the firm. However, management may be concerned about their ability to meet shipment guidance, executing on their strategic plan, and Gulf Coast projects.Specifically, management may lack confidence in their ability to meet their shipment guidance for 2019, continue executing on their strategic plan, and improve their cost structure. Furthermore, they may be concerned about the value of their rolling stock inventory and their positioning to capture Gulf Coast projects. In addition, they may be concerned about the impact of an early winter on their Mideast and Midwest business, and they may lack confidence in their ability to sustain recent cement operation revenues.
Martin Marietta Materials is a natural resource-based building materials company. The company supplies aggregates (crushed stone, sand and gravel) through its network of quarries, mines and distribution yards. The company also provides cement and downstream products, namely, ready mixed concrete, asphalt and paving services. The company conducts its Building Materials business through three segments: Mid-America Group, Southeast Group and West Group. The Mid-America and Southeast Groups provide aggregates products only. The West Group provides aggregates, cement and downstream products. The company also has the Magnesia Specialties segment, which includes its magnesia-based chemicals and dolomitic lime businesses.
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