Yahoo Finance Minerals Technologies Inc. (MTX) Soars to 52-Week High, Time to Cash Out?
Have you been paying attention to shares of Minerals Technologies (MTX)? Shares have been on the move with the stock up 6.7% over the past month. The stock hit a new 52-week high of $78.7 in the previous session. Minerals Technologies has gained 10.2% since the start of the year compared to the -1.6% move for the Zacks Basic Materials sector and the -20.9% return for the Zacks Chemical - Specialty industry.
What's Driving the Outperformance?
The stock has an impressive record of positive earnings surprises, as it hasn't missed our earnings consensus estimate in any of the last four quarters. In its last earnings report on April 25, 2024, Minerals Technologies reported EPS of $1.49 versus consensus estimate of $1.27 while it missed the consensus revenue estimate by 2.68%.
For the current fiscal year, Minerals Technologies is expected to post earnings of $6.28 per share on $2.23 billion in revenues. This represents a 20.73% change in EPS on a 2.79% change in revenues. For the next fiscal year, the company is expected to earn $7 per share on $2.34 billion in revenues. This represents a year-over-year change of 11.37% and 5.05%, respectively.
Valuation Metrics
Minerals Technologies may be at a 52-week high right now, but what might the future hold for the stock? A key aspect of this question is taking a look at valuation metrics in order to determine if the company has run ahead of itself.
On this front, we can look at the Zacks Style Scores, as these give investors a variety of ways to comb through stocks (beyond looking at the Zacks Rank of a security). These styles are represented by grades running from A to F in the categories of Value, Growth, and Momentum, while there is a combined VGM Score as well. Investors should consider the style scores a valuable tool that can help you to pick the most appropriate Zacks Rank stocks based on their individual investment style.
Minerals Technologies has a Value Score of B. The stock's Growth and Momentum Scores are B and B, respectively, giving the company a VGM Score of B.
In terms of its value breakdown, the stock currently trades at 12.5X current fiscal year EPS estimates, which is not in-line with the peer industry average of 17.7X. On a trailing cash flow basis, the stock currently trades at 9.7X versus its peer group's average of 11.1X. This isn't enough to put the company in the top echelon of all stocks we cover from a value perspective.
Zacks Rank
We also need to look at the Zacks Rank for the stock, as this supersedes any trend on the style score front. Fortunately, Minerals Technologies currently has a Zacks Rank of #1 (Strong Buy) thanks to rising earnings estimates.
Since we recommend that investors select stocks carrying Zacks Rank of 1 (Strong Buy) or 2 (Buy) and Style Scores of A or B, it looks as if Minerals Technologies passes the test. Thus, it seems as though Minerals Technologies shares could still be poised for more gains ahead.
How Does MTX Stack Up to the Competition?
Shares of MTX have been soaring, and the company still appears to be a decent choice, but what about the rest of the industry? One industry peer that looks good is Axalta Coating Systems Ltd. (AXTA). AXTA has a Zacks Rank of # 1 (Strong Buy) and a Value Score of C, a Growth Score of C, and a Momentum Score of A.
Earnings were strong last quarter. Axalta Coating Systems Ltd. beat our consensus estimate by 20%, and for the current fiscal year, AXTA is expected to post earnings of $1.97 per share on revenue of $5.3 billion.
Shares of Axalta Coating Systems Ltd. have gained 7.7% over the past month, and currently trade at a forward P/E of 17.98X and a P/CF of 12.44X.
The Chemical - Specialty industry is in the top 32% of all the industries we have in our universe, so it looks like there are some nice tailwinds for MTX and AXTA, even beyond their own solid fundamental situation.
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Minerals Technologies Inc. (MTX) : Free Stock Analysis Report
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