A KeyBanc analyst downgraded both Martin Marietta Materials and Vulcan Materials from buy to hold on Tuesday, saying the companies’ stock prices now reflect the potential boost they may get from public transportation spending in the coming years.

The stocks of both Raleigh-based Martin Marietta and Birmingham, Ala.-based Vulcan have posted double-digit percentage gains since Sept. 4. Martin Marietta shares, which closed Tuesday at $85.16, are up 14 percent over that period while Vulcan shares are up 22 percent.

Martin Marietta’s shares now reflect a gradual improvement in construction activity over time and the potential benefit if the company sweetens its offer to acquire Vulcan, wrote KeyBanc analyst Rodny? Nacier.

Martin Marietta officials have not signaled whether they intend to resume their efforts to acquire Vulcan. The company was banned by a Delaware judge from pursuing its hostile takeover for four months, but that order expired Sept. 14.

Martin Marietta Materials, which has been prohibited by court order from pursuing its hostile takeover bid of rival Vulcan Materials, could resume its efforts as early as Saturday.

The four-month quite period imposed by Delaware judge Leo Strine Jr. expires Friday. Officials with Raleigh-based Martin Marietta have given no signal as to whether they will revive their offer, which called for each outstanding share of Vulcan stock to be exchanged for 0.50 Martin Marietta shares.

Martin Marietta was forced to halt all efforts after Strine ruled in May that the company violated a 2010 confidentiality agreement with Vulcan in making its hostile takeover bid in December.

Vulcan's board of directors had earlier rejected Martin Marietta's bid, calling the proposal a lowball offer that seeks to exploit the downturn in U.S. construction spending to acquire a larger rival.

The credit rating agency Moody's has downgraded Martin Marietta Materials to junk status, partially in response to the Raleigh company's hostile takeover bid of rival Vulcan Materials.

Moody's announced Thursday that it was lowering Martin Marietta's credit rating to Ba1, one level below investment grade.

In explaining the downgrade, Moody's cited Martin Marietta's "willingness to take on greater financial and strategic risk than previously indicated by its unsolicited bid for Vulcan Materials Company. The rating incorporates the risk that the company may re-initiate its bid for Vulcan once allowed to do so, or may seek other, potentially debt financed, acquisitions to bolster languishing organic growth."

Moody's also said that Martin Marietta's rating would be placed on review if it reinitiates its acquisition attempt for Vulcan.

Moody's on Thursday also downgraded Birmingham-based Vulcan.

The Delaware Supreme Court has upheld a judge's ruling preventing Martin Marietta Materials from engaging in any activity related to its takeover bid for Vulcan Materials for four months.

The ruling means Martin Marietta will not be able to nominate four directors to Vulcan's board at the company's annual shareholders' meeting Friday.

Martin Marietta had already moved ahead with terminating the company's exchange offer to merge with Vulcan after the judge in the case denied the Raleigh company's request for a stay pending a ruling on its appeal.

Martin Marietta has said it will continue to pursue a merger with Vulcan after the four-month period is over. But the company will have to wait a full year for the next change to nominate directors to Vulcan's board.

Leo Strine, the Delaware judge in the case, ruled that Martin Marietta violated a 2010 confidentiality agreement with Vulcan in making its hostile takeover bid in December.

The ongoing saga between Martin Marietta Materials and Vulcan Materials has taken another unexpected turn.

Vulcan Materials' founding family has sued the company and its top management, accusing them of "gross mismanagement" in part because of their rejection of Martin Marietta Materials $4.7 billion takeover bid, Bloomberg News reports.

The lawsuit, filed by Glenn Ireland II and William C. Ireland Jr., also claims that Vulcan executives made a series of "disastrous, poorly vetted decisions" that loaded Vulcan down with debt and cut its value by more than half, Bloomberg reports.

"We believe the suit is entirely without merit," Vulcan said in a statement.

The lawsuit was filed in Alabama state court on Friday.

Martin Marietta Materials appeal of a recent Delaware court ruling will be heard May 31, the day before Vulcan Materials holds its annual shareholders' meeting.

Reuters reported Friday that the hearing for the appeal has been delayed from May 25 to May 31.

Raleigh-based Martin Marietta had planned to nominate four independent directors to Vulcan's board at the June 1 shareholders' meeting. But a Delaware judge recently ruled that Martin Marietta violated a 2010 confidentiality agreement with Vulcan in making its hostile takeover bid in December.

The judge in the case denied Martin Marietta’s request for a stay pending a ruling the appeal, which forced Martin Marietta to move ahead with terminating the company's exchange offer to merge with Vulcan.

If Martin Marietta loses its appeal, it will be prevented from pursuing any activities related to the merger for four months.

Martin Marietta Materials stock fell 8 percent on Wednesday after a well-known hedge-fund manager said at a New York conference that the Raleigh company had problems.

“Recent earnings benefited from one-time fiscal stimulus that is about to wind down,” said David Einhorn, co-founder of Greenlight Capital, according to Bloomberg News.

The stock’s sudden drop triggered a circuit breaker that halted trading of the company’s shares.

Einhorn, who was in negotiations last year to buy a share of the New York Mets, is known for his activist nature and for publicly criticizing stocks that he has shorted – meaning he has bet that the stock will fall. A year ago he called for Microsoft’s board to replace CEO Steve Ballmer.

Martin Marietta issued a statement Wednesday saying its recent financial performance made it different from other companies targeted by short sellers.

“Unlike companies often targeted by shorts, Martin Marietta has come through a challenging period for the industry by carefully managing capital and making disciplined operational decisions,” the statement said.

“We are profitable and have a solid balance sheet, which will allow us to capitalize on positive industry trends and positions us well for the future.”

Martin Marietta Materials announced late Monday that it is terminating the company's exchange offer to merge with rival Vulcan Materials in accordance with the ruling by the Delaware Court of Chancery.

The action was expected after the judge, Leo Strine Jr., ruled on May 4 that Martin Marietta violated a 2010 confidentiality agreement with Vulcan.

Martin Marietta is appealling the ruling, however. A decision on the appeal is likely to come before Vulcan's June 1 annual shareholders' meeting.

Raleigh-based Martin Marietta had planned to nominate four directors to Vulcan's board.

Vulcan Materials said Monday that a Delaware judge's ruling will order Martin Marietta Materials to withdraw its exchange offer and its proposal to put forward nominees to Vulcan's board.

Vulcan sent out a draft proposal of the final order to be issued by the Court of the Chancery in Delaware. The order follows a post-trial opinion issued May 4 by the judge in the case, Leo E. Strine, Jr.

In his opinion, Strine said Raleigh-based Martin Marietta violated a 2010 confidentiality agreement between the two companies and called for a four-month injunction that would prevent Martin Marietta from engaging in any activities related to a proposed merger.

Martin Marietta has said it will appeal Strine's ruling. 

The proposed final order says Martin Marietta shall also terminate and withdraw all regulatory filings related to its $4.7 billion hostile takeover bid.

The four-month suspension would prevent Martin Marietta from putting forward four nominees to Vulcan's 10-member board of directors at Vulcan's annual shareholders' meeting on June 1.

Martin Marietta Materials posted a wider first quarter loss than Wall Street analysts expected Tuesday but the Raleigh company raised its guidance for the rest of the year after sales increased 21 percent.

Company officials also said they would proceed with plans to nominate four directors to rival Vulcan Materials Board of Directors on June 1. Martin Marietta said it spent $25.9 million in the quarter on its efforts to merge with Vulcan.

Martin Marietta initiated its $4.7 billion takeover of its larger rival in December, and the companies have been trading lawsuits and public barbs ever since.

Excluding business development expenses and acquisition expenses, Martin Marietta reported a loss of 30 cents per diluted share in the quarter, compared to a loss of 39 cents during the same period a year ago.

Net sales, however, increased 20.6 percent to $350.5 million and Martin Marietta shipped 9.6 percent more materials than it did during the first quarter of 2011.

The company, which provides the materials used to build roads, subdivisions and commercial buildings, is considered a bellwether for the construction industry.