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US$61.50: That's What Analysts Think Materion Corporation Is Worth After Its Latest Results

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Last week, you might have seen that Materion Corporation (NYSE:MTRN) released its yearly result to the market. The early response was not positive, with shares down 5.8% to US$53.06 in the past week. It looks like the results were a bit of a negative overall. While revenues of US$1.2b were in line with analyst predictions, statutory earnings were less than expected, missing estimates by 3.9% to hit US$2.45 per share. Following the result, 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. So we gathered the latest post-earnings forecasts to see what analysts' statutory forecasts suggest is in store for next year.

View our latest analysis for Materion

NYSE:MTRN Past and Future Earnings, February 17th 2020
NYSE:MTRN Past and Future Earnings, February 17th 2020

Following last week's earnings report, Materion's four analysts are forecasting 2020 revenues to be US$1.17b, approximately in line with the last 12 months. Statutory earnings per share are expected to soar 29% to US$3.21. In the lead-up to this report, analysts had been modelling revenues of US$1.21b and earnings per share (EPS) of US$3.45 in 2020. It's pretty clear that analyst sentiment has fallen after the latest results, leading to lower revenue forecasts and a minor downgrade to earnings per share estimates.

It'll come as no surprise then, to learn that analysts have cut their price target 6.5% to US$61.50. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. There are some variant perceptions on Materion, with the most bullish analyst valuing it at US$62.00 and the most bearish at US$61.00 per share. Still, with such a tight range of estimates, it suggests analysts have a pretty good idea of what they think the company is worth.

Further, we can compare these estimates to past performance, and see how Materion forecasts compare to the wider market's forecast performance. These estimates imply that sales are expected to slow, with a forecast revenue decline of 1.7% a significant reduction from annual growth of 3.2% over the last five years. By contrast, our data suggests that other companies (with analyst coverage) in the same market are forecast to see their revenue grow 3.8% annually for the foreseeable future. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - analysts also expect Materion to grow slower than the wider market.

The Bottom Line

The most important thing to take away is that analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. On the negative side, they also downgraded their revenue estimates, and forecasts imply revenues will perform worse than the wider market. Analysts also downgraded their price target, suggesting that the latest news has led analysts to become more pessimistic about the intrinsic value of the business.

Still, the long-term prospects of the business are much more relevant than next year's earnings. At Simply Wall St, we have a full range of analyst estimates for Materion going out to 2024, and you can see them free on our platform here..

We also provide an overview of the Materion Board and CEO remuneration and length of tenure at the company, and whether insiders have been buying the stock, here.

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.

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. Thank you for reading.