Martin Marietta Materials' (MLM) proposed acquisition of Lhoist North American Lime operations is slightly expensive, but strategically makes sense, RBC Capital Markets said in a Thursday research report.

The brokerage said it estimates the deal would increase its 2027 revenue and EPS forecasts by 24% and 4%, respectively, assuming the transaction closes by the end of 2026 and half of the expected synergies are realized.

Martin Marietta is likely to extract far more value from the more than 2 billion tonnes of limestone reserves acquired through the deal than Lhoist currently does, according to the note.

A medium-term bull case for the acquisition can be justified given a more diversified revenue profile, potential upside to cost and revenue synergies and greater M&A opportunities going forward.

RBC has a sector perform rating on the stock with a price target of $615 per share.

Shares of Martin Marietta were up more than 2% in Thursday trading.

Price: 592.31, Change: +13.07, Percent Change: +2.26