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Vulcan Materials Company Just Released Its Annual Results And Analysts Are Updating Their Estimates

Last week, you might have seen that Vulcan Materials Company (NYSE:VMC) released its full-year result to the market. The early response was not positive, with shares down 6.7% to US$135 in the past week. Revenues of US$4.9b were in line with forecasts, although statutory earnings per share (EPS) came in below expectations at US$4.63, missing estimates by 2.8%. Earnings are an important time for investors, as they can track a company's performance, look at what top analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether analysts have changed their mind on Vulcan Materials after the latest results.

See our latest analysis for Vulcan Materials

NYSE:VMC Past and Future Earnings, February 20th 2020
NYSE:VMC Past and Future Earnings, February 20th 2020

Taking into account the latest results, the current consensus from Vulcan Materials's 14 analysts is for revenues of US$5.28b in 2020, which would reflect a modest 7.1% increase on its sales over the past 12 months. Statutory earnings per share are expected to step up 19% to US$5.60. Before this earnings report, analysts had been forecasting revenues of US$5.31b and earnings per share (EPS) of US$5.78 in 2020. Analysts seem to have become a little more negative on the business after the latest results, given the minor downgrade to their earnings per share forecasts for next year.

The consensus price target held steady at US$156, with analysts seemingly voting that their lower forecast earnings are not expected to lead to a lower stock price in the foreseeable future. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. There are some variant perceptions on Vulcan Materials, with the most bullish analyst valuing it at US$182 and the most bearish at US$104 per share. 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.

Further, we can compare these estimates to past performance, and see how Vulcan Materials forecasts compare to the wider market's forecast performance. We would highlight that Vulcan Materials's revenue growth is expected to slow, with forecast 7.1% increase next year well below the historical 9.3%p.a. growth over the last five years. Compare this to the other companies in this market with analyst coverage, which are forecast to grow their revenue at 6.8% per year. So it's pretty clear that, while Vulcan Materials's revenue growth is expected to slow, it's expected to grow roughly in line with the industry.

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. They also reconfirmed their revenue estimates, with the company predicted to grow at about the same rate as the wider market. 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 said, the long-term trajectory of the company's earnings is a lot more important than next year. We have estimates - from multiple Vulcan Materials analysts - going out to 2023, and you can see them free on our platform here.

It might also be worth considering whether Vulcan Materials's debt load is appropriate, using our debt analysis tools on the Simply Wall St platform, 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.