Have you ever been taking note of shares of Matson (MATX)? Shares have been on the transfer with the replenish 3.1% over the previous month. The inventory hit a brand new 52-week excessive of $144.93 within the earlier session. Matson has gained 30.1% for the reason that begin of the 12 months in comparison with the 0.5% transfer for the Zacks Transportation sector and the -2.8% return for the Zacks Transportation – Providers trade.
What’s Driving the Outperformance?
The inventory has a formidable document of constructive earnings surprises, because it hasn’t missed our earnings consensus estimate in any of the final 4 quarters. In its final earnings report on August 1, 2024, Matson reported EPS of $3.31 versus consensus estimate of $3.05 whereas it missed the consensus income estimate by 1.66%.
For the present fiscal 12 months, Matson is predicted to publish earnings of $11.45 per share on $3.41 billion in revenues. This represents a 37.74% change in EPS on a ten.12% change in revenues. For the following fiscal 12 months, the corporate is predicted to earn $9.10 per share on $3.27 billion in revenues. This represents a year-over-year change of -20.51% and -4.07%, respectively.
Valuation Metrics
Matson could also be at a 52-week excessive proper now, however what would possibly the long run maintain for the inventory? A key side of this query is having a look at valuation metrics with a view to decide if the corporate is due for a pullback from this stage.
On this entrance, we will take a look at the Zacks Model Scores, as these give traders a wide range of methods to comb by way of shares (past trying on the Zacks Rank of a safety). These types are represented by grades operating from A to F within the classes of Worth, Development, and Momentum, whereas there’s a mixed VGM Rating as effectively. Buyers ought to contemplate the type scores a precious software that may make it easier to to choose essentially the most applicable Zacks Rank shares based mostly on their particular person funding type.
Matson has a Worth Rating of A. The inventory’s Development and Momentum Scores are B and B, respectively, giving the corporate a VGM Rating of A.
By way of its worth breakdown, the inventory at the moment trades at 12.5X present fiscal 12 months EPS estimates, which isn’t in-line with the peer trade common of 17.6X. On a trailing money stream foundation, the inventory at the moment trades at 8.6X versus its peer group’s common of 9.1X. This is not sufficient to place the corporate within the high echelon of all shares we cowl from a price perspective.
Zacks Rank
We additionally want to contemplate the inventory’s Zacks Rank, as this supersedes any development on the type rating entrance. Thankfully, Matson at the moment has a Zacks Rank of #2 (Purchase) because of rising earnings estimates.
Since we advocate that traders choose shares carrying Zacks Rank of 1 (Sturdy Purchase) or 2 (Purchase) and Model Scores of A or B, it appears as if Matson suits the invoice. Thus, it appears as if Matson shares may have potential within the weeks and months to come back.
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The views and opinions expressed herein are the views and opinions of the writer and don’t essentially mirror these of Nasdaq, Inc.
