Looking at Albemarle Corporation's (NYSE:ALB) earnings update in March 2019, analyst consensus outlook appear bearish, as a 2.2% fall in profits is expected in the upcoming year relative to the past 5-year average growth rate of 9.1%. Currently with a trailing-twelve-month profit of US$694m, the consensus growth rate suggests that earnings will drop to US$678m by 2020. I will provide a brief commentary around the figures and analyst expectations in the near term. For those keen to understand more about other aspects of the company, you can research its fundamentals here.
How is Albemarle going to perform in the near future?
The longer term expectations from the 21 analysts of ALB is tilted towards the positive sentiment. Since forecasting becomes more difficult further into the future, broker analysts generally project out to around three years. To reduce the year-on-year volatility of analyst earnings forecast, I've inserted a line of best fit through the expected earnings figures to determine the annual growth rate from the slope of the line.
This results in an annual growth rate of 8.1% based on the most recent earnings level of US$694m to the final forecast of US$837m by 2022. This leads to an EPS of $7.71 in the final year of projections relative to the current EPS of $6.4. However, the near term margins may change heading into 2022, from the current levels of 21% to 19%.
Future outlook is only one aspect when you're building an investment case for a stock. For Albemarle, I've compiled three fundamental aspects you should look at:
- 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!
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
If you spot an error that warrants correction, please contact the editor at email@example.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.