Goldman Sachs Launches Coverage of MLM And VMC

Goldman Sachs (NYSE: GS) initiated coverage of construction materials firms Martin Marietta (NYSE: MLM) and Vulcan Materials (NYSE: VMC). The bank rates the former a buy, and the latter a neutral.

The bank is generally bullish on the industry, believing that “consensus drastically underestimates the impact of accelerating residential construction on aggregates demand.” As a result, Goldman’s 2011 estimates for the sector are around 20% above consensus.

The bank favors Martin Marietta over Vulcan due to a more attractive valuation and better balance sheet capacity for mergers and acquisitions.

MLM was up $2.56 in trading today to close at $85.06; VMC traded down 35 cents to $47.69.