Analysts Have Made A Financial Statement On Martin Marietta Materials, Inc.'s (NYSE:MLM) Yearly Report
Investors in Martin Marietta Materials, Inc. (NYSE:MLM) had a good week, as its shares rose 2.4% to close at US$540 following the release of its full-year results. Martin Marietta Materials reported in line with analyst predictions, delivering revenues of US$6.8b and statutory earnings per share of US$18.82, suggesting the business is executing well and in line with its plan. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.
View our latest analysis for Martin Marietta Materials
Following the latest results, Martin Marietta Materials' 16 analysts are now forecasting revenues of US$6.98b in 2024. This would be a satisfactory 3.0% improvement in revenue compared to the last 12 months. Per-share earnings are expected to accumulate 8.8% to US$21.11. Before this earnings report, the analysts had been forecasting revenues of US$7.31b and earnings per share (EPS) of US$20.90 in 2024. The consensus seems maybe a little more pessimistic, trimming their revenue forecasts after the latest results even though there was no change to its EPS estimates.
The average price target was steady at US$560even though revenue estimates declined; likely suggesting the analysts place a higher value on earnings. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. Currently, the most bullish analyst values Martin Marietta Materials at US$642 per share, while the most bearish prices it at US$350. There are definitely some different views on the stock, but the range of estimates is not wide enough as to imply that the situation is unforecastable, in our view.
One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. We would highlight that Martin Marietta Materials' revenue growth is expected to slow, with the forecast 3.0% annualised growth rate until the end of 2024 being well below the historical 10% p.a. growth over the last five years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 6.3% annually. Factoring in the forecast slowdown in growth, it seems obvious that Martin Marietta Materials is also expected to grow slower than other industry participants.
The Bottom Line
The most important thing to take away is that there's been no major change in sentiment, with the analysts reconfirming that the business is performing in line with their previous earnings per share estimates. On the negative side, they also downgraded their revenue estimates, and forecasts imply they will perform worse than the wider industry. Even so, earnings per share are more important to the intrinsic value of the business. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.
With that in mind, we wouldn't be too quick to come to a conclusion on Martin Marietta Materials. Long-term earnings power is much more important than next year's profits. We have forecasts for Martin Marietta Materials going out to 2026, and you can see them free on our platform here.
It might also be worth considering whether Martin Marietta Materials' debt load is appropriate, using our debt analysis tools on the Simply Wall St platform, here.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
