Amphenol Corporation (NYSE:APH) just released its latest yearly results and things are looking bullish. Results were good overall, with revenues beating analyst predictions by 2.4% to hit US$8.6b. Statutory earnings per share (EPS) came in at US$3.91, some 3.1% above whatthe analysts had expected. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.
Following the latest results, Amphenol's 14 analysts are now forecasting revenues of US$9.13b in 2021. This would be a modest 6.2% improvement in sales compared to the last 12 months. Statutory earnings per share are predicted to increase 6.6% to US$4.31. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$9.08b and earnings per share (EPS) of US$4.31 in 2021. The consensus analysts don't seem to have seen anything in these results that would have changed their view on the business, given there's been no major change to their estimates.
It will come as no surprise then, to learn that the consensus price target is largely unchanged at US$139. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. There are some variant perceptions on Amphenol, with the most bullish analyst valuing it at US$157 and the most bearish at US$105 per share. Analysts definitely have varying views on the business, but the spread of estimates is not wide enough in our view to suggest that extreme outcomes could await Amphenol shareholders.
Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. It's pretty clear that there is an expectation that Amphenol's revenue growth will slow down substantially, with revenues next year expected to grow 6.2%, compared to a historical growth rate of 8.7% over the past five years. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 7.4% next year. Factoring in the forecast slowdown in growth, it looks like Amphenol is forecast to grow at about the same rate as the wider industry.
The Bottom Line
The most obvious conclusion is that there's been no major change in the business' prospects in recent times, with the analysts holding their earnings forecasts steady, in line with previous estimates. They also reconfirmed their revenue estimates, with the company predicted to grow at about the same rate as the wider industry. 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.
Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. At Simply Wall St, we have a full range of analyst estimates for Amphenol going out to 2024, and you can see them free on our platform here..
However, before you get too enthused, we've discovered 2 warning signs for Amphenol that you should be aware of.
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. 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.
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