Analysts with Sterne Agee have boosted their target price for shares of Martin Marietta Materials, citing management’s expectations for the future and the momentum now building in the industry.
Raleigh-based Martin Marietta reported strong fourth-quarter earnings last week that handily beat Wall Street estimates. The company’s stock rose 15 percent the day the earnings were released.
Analysts Todd Vencil and Kevin Bennett have boosted their target price for the stock from $145.23 to $165. Martin Marietta shares closed Friday at $145.23.
“We believe the momentum in the heavy-side construction materials business – especially in aggregates and cement – has built over the last couple of years and is now palpable,” the analysts wrote in their report. “This boosts confidence among the companies we follow, as well as their customers and suppliers, leading to higher levels of price increase and investment.”
Martin Marietta produces rock, gravel and other materials used to build roads, subdivisions and commercial buildings. The company is investing $320 million into its business this year, and plans to spend $350 million a year through 2019.
Investors have also been responding to the company’s announcement last week that it plans to buy back 20 million of its shares over the next three years.
Martin Marietta forecasts that shipments of materials will increase 10 to 12 percent in 2015, with pricing rising 4 to 6 percent. The growth is being driven by an improving U.S. economy, which has increased construction activity in both commercial and residential sectors and made it more likely that state governments will make infrastructure investments in the years ahead.