Martin Marietta Materials (MLM) is set to benefit from its "transformational" acquisition of Lhoist North America, RBC Capital Markets said in a note Friday.
"Lime is aggregates plus: better pricing power, contracted revenue, minimal cyclicality, and superior free cash flow conversion," the report said.
Earlier this week, Martin Marietta said it completed its acquisition of Lhoist North America, a producer of high calcium lime, dolomitic lime and industrial mineral products.
RBC analysts raised revenue and EBITDA estimates for 2026 and 2027 to take into account the acquisition, and pointed to market undervaluing over $150 million of unquantified synergies.
"Q3 will be noisy...but once that is out of the way and with a clean Q4 ahead and 2027 repricing catalysts stacking up, MLM is set to step into the Lime light and deliver a strong performance," the report said.
RBC raised its price target to $620 from $610 while keeping its sector perform rating.
Price: $527.40, Change: $-1.19, Percent Change: -0.23%