2023-04-03 08:28:54 ET
Vulcan Materials ( NYSE: VMC ) and Martin Marietta Materials ( NYSE: MLM ) on Monday were both upgraded to Buy from prior investment ratings of Neutral by analysts at Goldman Sachs. They said the makers of materials for roadbuilding and construction are attractively priced on a risk-reward basis.
“We note this call could be early as our estimates are still 10% below consensus near-term, but with valuation, volumes and price/cost closer to trough than mid-cycle we see attractive risk-reward,” Jerry Revich, analyst at Goldman Sachs, said in an April 3 report.
The bank also upgraded Primoris ( NASDAQ: PRIM ) to Neutral from a prior rating of Sell. The specialty construction company’s pipeline segment profit bottomed at levels 70% less than they were at the time of Goldman Sachs’s downgrade in November 2021, according to the report.
Conversely, Goldman Sachs lowered the ratings of three machinery stocks. Oshkosh ( NYSE: OSK ) and Agco ( NYSE: AGCO ) were downgraded to Neutral from a prior recommendation of Buy, and Manitowoc ( NYSE: MTW ) was cut to Sell from Neutral.
“We entered the year negative on supply risks and positive on price/costs,” the report said. “Estimates are now +4% YTD on higher margins, but the supply picture has deteriorated with rising used inventories across construction, agriculture and truck markets.”
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Vulcan, Martin Marietta raised to Buy as Goldman Sachs turns positive on building materials