UPDATE: DA Davidson Downgrades Martin Marietta Materials to Underperform

DA Davidson downgrades Martin Marietta Materials MLM to Underperform from Neutral on expected multiple contraction throughout recovery. DA Davidson notes, "We believe Martin Marietta will see earnings grow in the next three years as market conditions improve, although we believe these shares will not sustain current multiples of EBITDA (~15x trailing EBITDA) as construction conditions normalize. Over the course of a recovery in the cycle we see EBITDA multiples returning toward the company's historical average (~10x). Our $75 price target represents ~10x our 2013 EBITDA estimate. On a pro forma basis, our price target also reflects ~10x our estimate of 2013 EBITDA assuming a combination with Vulcan Materials." MLM closed at $86.24 a share yesterday.