With a price-to-earnings (or "P/E") ratio of 29.3x Minerals Technologies Inc. (NYSE:MTX) may be sending very bearish signals at the moment, given that almost half of all companies in the United States have P/E ratios under 17x and even P/E's lower than 9x are not unusual. Nonetheless, we'd need to dig a little deeper to determine if there is a rational basis for the highly elevated P/E.
With earnings that are retreating more than the market's of late, Minerals Technologies has been very sluggish. One possibility is that the P/E is high because investors think the company will turn things around completely and accelerate past most others in the market. You'd really hope so, otherwise you're paying a pretty hefty price for no particular reason.
NYSE:MTX Price to Earnings Ratio vs Industry May 27th 2024
If you'd like to see what analysts are forecasting going forward, you should check out our free report on Minerals Technologies.
What Are Growth Metrics Telling Us About The High P/E?
Minerals Technologies' P/E ratio would be typical for a company that's expected to deliver very strong growth, and importantly, perform much better than the market.
Taking a look back first, the company's earnings per share growth last year wasn't something to get excited about as it posted a disappointing decline of 18%. As a result, earnings from three years ago have also fallen 13% overall. So unfortunately, we have to acknowledge that the company has not done a great job of growing earnings over that time.
Shifting to the future, estimates from the four analysts covering the company suggest earnings should grow by 38% per year over the next three years. With the market only predicted to deliver 10.0% per year, the company is positioned for a stronger earnings result.
With this information, we can see why Minerals Technologies is trading at such a high P/E compared to the market. It seems most investors are expecting this strong future growth and are willing to pay more for the stock.
The Key Takeaway
We'd say the price-to-earnings ratio's power isn't primarily as a valuation instrument but rather to gauge current investor sentiment and future expectations.
We've established that Minerals Technologies maintains its high P/E on the strength of its forecast growth being higher than the wider market, as expected. Right now shareholders are comfortable with the P/E as they are quite confident future earnings aren't under threat. It's hard to see the share price falling strongly in the near future under these circumstances.
We don't want to rain on the parade too much, but we did also find 2 warning signs for Minerals Technologies that you need to be mindful of.
It's important to make sure you look for a great company, not just the first idea you come across. So take a peek at this free list of interesting companies with strong recent earnings growth (and a low P/E).
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
Minerals Technologies Inc.(紐約證券交易所代:MTX)的市盈率(或"P/E")爲29.3倍,目前可能發出了非常看跌的信號,因爲美國幾乎有一半公司的市盈率低於17倍,甚至低於9倍的市盈率也並不罕見。儘管如此,我們需要更深入地挖掘,以確定市盈率大幅上漲是否有合理的基礎。
由於收益的回落幅度超過了最近的市場,礦業科技一直非常疲軟。一種可能性是市盈率居高不下,因爲投資者認爲該公司將徹底扭轉局面,加速超越市場上的大多數其他公司。你真的希望如此,否則你會無緣無故地付出相當大的代價。
紐約證券交易所:2024年5月27日與行業對比的MTX市盈率
如果你想了解分析師對未來的預測,你應該查看我們的免費礦業技術報告。
關於高市盈率,增長指標告訴我們什麼?
Minerals Technologies的市盈率對於一家預計將實現非常強勁的增長,重要的是表現要好於市場的公司來說是典型的。
首先回顧一下,該公司去年的每股收益增長並不令人興奮,因爲它公佈了令人失望的18%的跌幅。結果,三年前的總體收益也下降了13%。因此,不幸的是,我們必須承認,在此期間,該公司在增加收益方面做得不好。
展望未來,報道該公司的四位分析師的估計表明,未來三年收益每年將增長38%。由於預計市場每年僅增長10.0%,該公司有望實現更強勁的盈利業績。
有了這些信息,我們可以明白爲什麼礦業科技的市盈率與市場相比如此之高。看來大多數投資者都在期待這種強勁的未來增長,並願意爲該股支付更多費用。
關鍵要點
我們可以說,市盈率的力量主要不是作爲估值工具,而是衡量當前投資者情緒和未來預期。
我們已經確定,Minerals Technologies之所以保持高市盈率,是因爲其預測的增長將高於整個市場,正如預期的那樣。目前,股東對市盈率感到滿意,因爲他們非常有信心未來的收益不會受到威脅。在這種情況下,很難看到股價在不久的將來會強勁下跌。
我們不想在遊行隊伍中下太多雨,但我們也發現了礦業科技的兩個警告標誌,你需要注意。
重要的是要確保你尋找一家優秀的公司,而不僅僅是你遇到的第一個想法。因此,來看看這份免費名單,列出了最近收益增長強勁(市盈率低)的有趣公司。
對這篇文章有反饋嗎?對內容感到擔憂嗎?請直接聯繫我們。或者,也可以發送電子郵件至編輯團隊 (at) simplywallst.com。
Simply Wall St的這篇文章本質上是籠統的。我們僅使用公正的方法根據歷史數據和分析師的預測提供評論,我們的文章無意作爲財務建議。它不構成買入或賣出任何股票的建議,也沒有考慮到您的目標或財務狀況。我們的目標是爲您提供由基本數據驅動的長期重點分析。請注意,我們的分析可能不考慮最新的價格敏感型公司公告或定性材料。簡而言之,華爾街沒有持有任何上述股票的頭寸。