Martin Marietta Materials, Inc. (NYSE:MLM): Is It A Smart Long Term Opportunity?

Looking at Martin Marietta Materials, Inc.’s (NYSE:MLM) earnings update on 31 December 2018, analyst consensus outlook appear cautiously optimistic, with profits predicted to increase by 20% next year, though this is evidently lower than the previous 5-year average earnings growth of 34%. By 2020, we can expect Martin Marietta Materials’s bottom line to reach US$563m, a jump from the current trailing-twelve-month of US$469m. Below is a brief commentary around Martin Marietta Materials’s earnings outlook going forward, which may give you a sense of market sentiment for the company. For those interested in more of an analysis of the company, you can research its fundamentals here.

See our latest analysis for Martin Marietta Materials

How will Martin Marietta Materials perform in the near future?

The view from 12 analysts over the next three years is one of positive sentiment. Since forecasting becomes more difficult further into the future, broker analysts generally project out to around three years. 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, February 28th 2019
NYSE:MLM Past and Future Earnings, February 28th 2019

By 2022, MLM’s earnings should reach US$763m, from current levels of US$469m, resulting in an annual growth rate of 16%. EPS reaches $12.13 in the final year of forecast compared to the current $7.46 EPS today. Margins are currently sitting at 12%, which is expected to expand to 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 key aspects you should further examine:

  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.