Albemarle Corporation (NYSE:ALB): Immense Growth Potential?
On 30 September 2018, Albemarle Corporation (NYSE:ALB) released its earnings update. Generally, analysts seem highly optimistic, with earnings expected to grow by a high double-digit of 93% in the upcoming year, compared with the previous 5-year average growth rate of -3.3%. By 2019, we can expect Albemarle’s bottom line to reach US$106m, a jump from the current trailing-twelve-month US$55m. In this article, I’ve outline a few earnings growth rates to give you a sense of the market sentiment for Albemarle in the longer term. Readers that are interested in understanding the company beyond these figures should research its fundamentals here.
View our latest analysis for Albemarle
Exciting times ahead?
The view from 22 analysts over the next three years is one of positive sentiment. Generally, broker analysts tend to make predictions for up to three years given the lack of visibility beyond this point. To get an idea of the overall earnings growth trend for ALB, I’ve plotted out each year’s earnings expectations and inserted a line of best fit to determine an annual rate of growth from the slope of this line.
This results in an annual growth rate of 9.1% based on the most recent earnings level of US$55m to the final forecast of US$127m by 2021. This leads to an EPS of $7.49 in the final year of projections relative to the current EPS of $0.49. In 2021, ALB’s profit margin will have expanded from 1.8% to 3.4%.
Next Steps:
Future outlook is only one aspect when you’re building an investment case for a stock. For Albemarle, I’ve put together three essential aspects you should further examine:
Financial Health: Does it have a healthy balance sheet? Take a look at our free balance sheet analysis with six simple checks on key factors like leverage and risk.
Valuation: What is Albemarle worth today? Is the stock undervalued, even when its growth outlook is factored into its intrinsic value? The intrinsic value infographic in our free research report helps visualize whether Albemarle is currently mispriced by the market.
Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of Albemarle? Explore our interactive list of stocks with large growth potential to get an idea of what else is out there you may be missing!
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at editorial-team@simplywallst.com.
