Q3 Earnings Preview for Martin Marietta Materials (NYSE:MLM)

in EARNINGS/INVESTING IDEAS by

Martin Marietta Materials, Inc. (NYSE:MLM) is scheduled to report Q3 earnings results before markets open for trading on October 29, 2020.

The company is expected to report earnings of $3.77/share on revenue of $1.354 billion. The consensus earnings per share (EPS) of $3.77/share is based on a poll of 12 analysts and represents a decline in eps of −4.8% over the same quarter last year, when the company reported earnings of $3.96/share.

The revenue forecast of $1.354 billion based on a poll of 10 analysts implies a year-over-year (YoY) decline in revenue of −4.7%. Last year the company reported $1.42 billion in revenue for the quarter.

Expected to report EPS contraction of −4.8% for Q3, 2020
Metric Expected Prior Year YoY Change
Revenue $1,353.65 $1,420.25 −4.7%
EPS $3.77 $3.96 −4.8%

Earnings Call Trends

Historically, management has exceeded analyst expectations 4 out of the last 8 tracked quarters, and missed expectations 4 quarters.

What are your expectations from Martin Marietta Materials, Inc. for earnings this quarter? Let us know in the comments!

Analyst Expected vs. Reported EPS
Quarter Expected Reported Surprise Result
Q2, 2020 $2.97 $3.49 17.6% Beat
Q1, 2020 $0.53 $0.41 −22.9% Missed
Q4, 2019 $2.21 $2.09 −5.3% Missed
Q3, 2019 $3.51 $3.96 12.8% Beat
Q2, 2019 $3.11 $3.01 −3.1% Missed
Q1, 2019 $0.42 $0.68 61.2% Beat
Q4, 2018 $1.76 $1.66 −5.7% Missed
Q3, 2018 $2.80 $3.07 9.5% Beat

In the following table, we summarize the company’s stock price movements after earnings releases. The “Price Day Prior” column shows the closing stock price on the day before the earnings report, and the “Price Next Day” column shows the stock price at the end of the trading day after the earnings report. After the last earnings report for the period ending June 30, 2020, the stock price reacted by falling −6.1%.

Stock Price Performance After Earnings
Report Date Price Day Prior Price Next Day Change % Result
July 28, 2020 $228 $214.13 −6.1% Decline
May 5, 2020 $190.65 $174.49 −8.5% Decline
February 11, 2020 $276.79 $260 −6.1% Decline
October 29, 2019 $269.05 $266.85 −0.8% Decline

The other question to consider is one of earnings manipulation. There is a lot of pressure on management each quarter to deliver on earnings expectations. The Beneish M-Score is a statistical model that provides some insight into whether the company might be manipulating earnings. With a Beneish M-Score of −2.66, the model suggests that the company is not likely to be an earnings manipulator. A value of −2.66 implies a 0.4% chance of earnings manipulation.

Fundamentals And Technical Analysis

Martin Marietta Materials, Inc. is currently trading at $254.25/share, down −3.1% for the day. The company is trading at approximately 90.2% of its 52-week high of $281.82/share. The company’s stock price is up 18.7% since the last earnings report and down −1.1% over the previous week. The company’s 14 Day Relative Price Index (RSI) of 58.21 suggests the company is trading in technically neutral territory. The RSI is considered overbought when above 70 and oversold when below 30.


NYSE:MLM Stock Price Chart
Source: Finbox

The current share price implies a price-to-earnings (P/E) multiple of 25.43 and a forward P/E multiple of 27.36.

Martin Marietta Materials, Inc.’s current share price also implies a price-to-book (P/B) multiple of 2.88. The following table summarizes some other key fundamental ratios:

Data as of October 27, 2020
Metric Value
Last Reported Fiscal Period Key FY2020.Q2
Period End Date June 30, 2020
Stock Price (Current) $254.25
P/E Ratio 25.4x
P/E Ratio (Fwd) 27.4x
PEG Ratio 1.1
Total Debt / Total Capital 16.5%
Levered Free Cash Flow $643.8 million
EV / EBITDA 14.8x

Finbox

Martin Marietta Materials, Inc. is a large-cap stock with a market capitalization of $15.832 billion and a total enterprise value of $18.991 billion. The company operates in the Materials sector and the Construction Materials industry.

Martin Marietta Materials, Inc., a natural resource-based building materials company, supplies aggregates and heavy building materials to the construction industry in the United States and internationally. It offers crushed stone, sand, and gravel products; ready mixed concrete and asphalt; paving products and services; Portland and specialty cement used in the infrastructure projects, and nonresidential and residential construction markets, as well as in the railroad, agricultural, utility, and environmental industries. The company also manufactures and markets magnesia-based chemical products for the industrial, agricultural, and environmental applications; and dolomitic lime primarily for customers in the steel and mining industries, as well as provides road paving construction services. Its chemical products are used in flame retardants, wastewater treatment, pulp and paper production, and other environmental applications. The company was founded in 1993 and is headquartered in Raleigh, North Carolina.

Expertise: financial technology, analyzing market trends. Brian is a founder at finbox.io, where he’s focused on building tools that make it faster and easier for investors to research stock fundamentals. Brian’s background is in physics & computer science and previously worked as a software engineer at GE Healthcare. He enjoys applying his expertise in technology to help find market trends that impact investors. Brian can be reached at brian@finbox.io or at +1 (516) 778-6257.

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