Jefferies Says Buying Opportunity Exists in Martin Marietta and Vulcan Materials Stock as Energy Prices Surge

LootboxPhobia · 2026-03-20T22:04:27+00:00

Jefferies analysis indicates that the Iran war led to an 18% decline in the building materials sector, recommending attention to stocks such as Martin Marietta and Vulcan Materials due to their low sensitivity to consumer and energy prices, making them attractive. James Hardie and Trex are also investment opportunities in the residential sector, while Mohawk Industries is vulnerable due to its sales reliance on high energy prices. The overall market faces high energy prices and an uncertain interest rate environment.

LootboxPhobia

2026-03-20 22:04:27

Abstract generation in progress

Investing.com - Jefferies noted that since the outbreak of the Iran war three weeks ago, the building materials sector has declined by 18%, while the broader market has only fallen by 4%. Against this backdrop, building materials stocks such as Martin Marietta Materials (NYSE: MLM), Vulcan Materials (NYSE: VMC), and Ferguson (NYSE: FERG) have presented buying opportunities.

The firm stated that these three companies are less sensitive to consumer spending, energy prices, and interest rates, making their current valuations more attractive. Although Martin Marietta and Vulcan Materials will face short-term margin pressures from rising diesel prices (which account for 7-10% of their sales costs), their management teams view inflation as an opportunity to raise prices mid-year. Demand from infrastructure projects, data centers, power plants, and liquefied natural gas facilities is expected to remain stable.

Jefferies also emphasized that James Hardie Industries (NYSE: JHX) and Trex (NYSE: TREX) are attractive investment targets in the residential sector, with both stocks currently trading at a 20-40% discount to their historical valuation multiples at the bottom of repair and renovation cycles. James Hardie has delivered solid results over the past two quarters and raised guidance, demonstrating business momentum and tangible benefits from the AZEK acquisition. Trex is expected to accelerate growth through increased marketing spend, new leadership, a stronger focus on innovation, and broader M&A activities.

The firm warned that Mohawk Industries (NYSE: MHK) is particularly vulnerable, as 31% of its sales come from Europe, where energy prices have surged significantly, and the company lacks pricing power. Builders FirstSource (NYSE: BLDR) faces challenges as the current environment makes it more difficult to achieve the expected substantial recovery in single-family housing starts by late 2026.

With the Iran war ongoing for three weeks and energy prices remaining high, no clear resolution is in sight, and exports of liquefied natural gas and refining capacity have been impacted. The 30-year fixed mortgage rate has briefly risen from below 6% at the end of February to 6.4%, and the Federal Reserve’s path to rate cuts remains uncertain.

This article was translated with the assistance of artificial intelligence. For more information, please see our Terms of Use.

View Original

This page may contain third-party content, which is provided for information purposes only (not representations/warranties) and should not be considered as an endorsement of its views by Gate, nor as financial or professional advice. See Disclaimer for details.

2 Likes