In the last week, the Materials industry is up 2.1%, with Anglo American Platinum up 4.7%. The industry has been flat over the past 12 months despite the gain this week. Looking forward, earnings are forecast to decline by 2.0% per year.
Sector Valuation and Performance
Has the South African Materials Sector valuation changed over the past few years?
Investors are pessimistic on the South African Materials industry, indicating that they anticipate long term growth rates will be lower than they have historically.
The industry is trading at a PE ratio of 6.9x which is lower than its 3-year average PE of 23.8x.
The industry is trading close to its 3-year average PS ratio of 1.3x.
Past Earnings Growth
The earnings for companies in the Materials industry have grown 74% per year over the last three years.
Revenues for these companies have grown 18% per year.
This means that more sales are being generated by these companies overall, and subsequently their profits are increasing too.
Which industries have driven the changes within the South African Materials sector?
Metals and Mining
Paper and Forestry Products
Investors are most optimistic about the Metals and Mining industry even though it's trading below its 3-year average PE ratio of 10.0x.
Analysts are expecting annual earnings decline of 1.9%, which is less than its past year's earnings decline of 4.5%.
Despite it being negative, analysts are least pessimistic on the Chemicals industry since they expect its earnings to decline by only 0.4% per year over the next 5 years, which isn't as bad as the other industries.
This is a reversal from its past annual earnings growth rate of 106% per year.
In contrast, the Paper and Forestry Products industry is expected to see its earnings decline by 18% per year over the next few years.
Top Stock Gainers and Losers
Which companies have driven the market over the last 7 days?