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What Should You Know About Martin Marietta Materials, Inc.'s (NYSE:MLM) Growth?

Simply Wall St

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After Martin Marietta Materials, Inc.'s (NYSE:MLM) earnings announcement on 31 March 2019, analysts seem cautiously bearish, as a 20% rise in profits is expected in the upcoming year, against the higher past 5-year average growth rate of 30%. By 2020, we can expect Martin Marietta Materials’s bottom line to reach US$562m, a jump from the current trailing-twelve-month of US$469m. I will provide a brief commentary around the figures and analyst expectations in the near term. For those interested in more of an analysis of the company, you can research its fundamentals here.

Check out our latest analysis for Martin Marietta Materials

How will Martin Marietta Materials perform in the near future?

The 14 analysts covering MLM view its longer term outlook with a positive sentiment. Generally, broker analysts tend to make predictions for up to three years given the lack of visibility beyond this point. I've plotted out each year's earnings expectations and inserted a line of best fit to calculate an annual growth rate from the slope in order to understand the overall trajectory of MLM's earnings growth over these next few years.

NYSE:MLM Past and Future Earnings, May 7th 2019

This results in an annual growth rate of 12% based on the most recent earnings level of US$469m to the final forecast of US$721m by 2022. This leads to an EPS of $12.4 in the final year of projections relative to the current EPS of $7.46. With a current profit margin of 12%, this movement will result in a margin of 15% by 2022.

Next Steps:

Future outlook is only one aspect when you're building an investment case for a stock. For Martin Marietta Materials, I've compiled three relevant factors you should look at:

  1. 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.
  2. Valuation: What is Martin Marietta Materials 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 Martin Marietta Materials is currently mispriced by the market.
  3. Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of Martin Marietta Materials? 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 editorial-team@simplywallst.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.