Transforming the Portfolio by Building a Specialties Powerhouse

Research evidence excerpt

Transforming the Portfolio by Building a Specialties Powerhouse

Idea

June 29, 2026 12:59 PM GMT

Morgan Stanley & Co. LLCMMartin Marietta Materials Inc | North America Angel Castillo

Equity Analyst

Transforming the Portfolio by Angel.Castillo@morganstanley.comEsther O Osinaiya +1 212 761-1931

Research Associate

Esther.Osinaiya@morganstanley.com +1 212 761-3176

Building a Specialties Stefan Diaz, CFA

Stefan.Diaz@morganstanley.com +1 212 761-1834

Powerhouse Oliver Jiang

Oliver.Jiang@morganstanley.com +1 212 761-6458

MLM agrees to combine with Lhoist North America for ~$13.5B

EV, establishing the #1 US lime producer. We see this as a high- Martin Marietta Materials Inc (MLM.N, MLM US)

quality, on-strategy asset (45% margin, 94% FCF conversion, 2B Machinery & Construction | United States of America

Stock Rating Overweight

+ tons reserves), and would expect the market to view it as such Industry View Attractive

Price target $664.00

as the dust settles. Shr price, close (Jun 26, 2026) $616.06

Mkt cap, curr (mm) $37,272

52-Week Range $710.48-526.09

Key Takeaways Fiscal Year Ending 12/25 12/26e 12/27e 12/28e

MLM to combine with Lhoist North America for ~$13.5B EV, funded with $7.0B EPS ($)** 18.77 18.91 23.52 26.46

cash and $6.5B MLM stock Prior EPS ($)** - - - -

P/E 33.2 32.6 26.2 23.3

Deal reflects ~15x 2025A LNA Adj. EBITDA (incl. run-rate cost synergies) and ~17x EPS ($)§ 18.07 19.53 22.86 26.77

Div yld (%) 0.5 0.5 0.6 0.6

2025A Adj. EBITDA

Unless otherwise noted, all metrics are based on Morgan Stanley ModelWare

MLM sees ~$85m of run-rate cost synergies by year 2 framework** = Based on consensus methodology

§ = Consensus data is provided by Refinitiv Estimates

Pro forma Combined Net Leverage of ~3.7x at close, normalizing toward <2.5x e = Morgan Stanley Research estimates