Martin Marietta (MLM) Surges 3.1%: Is This an Indication of Further Gains?

Martin Marietta (MLM) shares ended the last trading session 3.1% higher at $609.12. The jump came on an impressive volume with a higher-than-average number of shares changing hands in the session. This compares to the stock's 9.1% gain over the past four weeks.

MLM stock is expected to have climbed on the back of a favorable macro backdrop and improving sentiment toward infrastructure-materials stocks. Besides the company’s in-house efforts, the easing of geopolitical risks, primarily owing to the recent developments on the United States-Iran MOU agreement, and expectations of normalization of inflation are expected to have supported its growth. Besides, the stoic stance of the Fed in maintaining the current interest rate benchmark between 3.5% and 3.75% for now is likely to have stirred investors’ sentiments. Also, the reduction of mortgage rates to 6.47% from 6.52% as of the week ending on June 18, per Freddie Mac, added to the tailwinds, given MLM’s notable portion of aggregates demand coming from residential construction.

This seller of granite, limestone, sand and gravel is expected to post quarterly earnings of $4.90 per share in its upcoming report, which represents a year-over-year change of -9.8%. Revenues are expected to be $1.89 billion, up 4.2% from the year-ago quarter.

Earnings and revenue growth expectations certainly give a good sense of the potential strength in a stock, but empirical research shows that trends in earnings estimate revisions are strongly correlated with near-term stock price movements.

For Martin Marietta, the consensus EPS estimate for the quarter has been revised 2.2% higher over the last 30 days to the current level. And a positive trend in earnings estimate revision usually translates into price appreciation. So, make sure to keep an eye on MLM going forward to see if this recent jump can turn into more strength down the road.

The stock currently carries a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>

Martin Marietta belongs to the Zacks Building Products - Concrete and Aggregates industry. Another stock from the same industry, Vulcan Materials (VMC), closed the last trading session 2.7% higher at $302.84. Over the past month, VMC has returned 12%.

Vulcan's consensus EPS estimate for the upcoming report has changed +0.8% over the past month to $2.67. Compared to the company's year-ago EPS, this represents a change of +9%. Vulcan currently boasts a Zacks Rank of #3 (Hold).

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This article originally published on Zacks Investment Research (zacks.com).

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