Analysts Are Updating Their Carpenter Technology Corporation (NYSE:CRS) Estimates After Its Second-Quarter Results
Last week, you might have seen that Carpenter Technology Corporation (NYSE:CRS) released its quarterly result to the market. The early response was not positive, with shares down 4.5% to US$63.41 in the past week. Results look mixed - while revenue fell marginally short of analyst estimates at US$624m, statutory earnings were in line with expectations, at US$0.85 per share. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.
See our latest analysis for Carpenter Technology
After the latest results, the four analysts covering Carpenter Technology are now predicting revenues of US$2.80b in 2024. If met, this would reflect a reasonable 2.7% improvement in revenue compared to the last 12 months. Per-share earnings are expected to leap 38% to US$4.00. In the lead-up to this report, the analysts had been modelling revenues of US$2.84b and earnings per share (EPS) of US$4.02 in 2024. So it's pretty clear that, although the analysts have updated their estimates, there's been no major change in expectations for the business following the latest results.
The analysts reconfirmed their price target of US$86.00, showing that the business is executing well and in line with expectations. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. The most optimistic Carpenter Technology analyst has a price target of US$100.00 per share, while the most pessimistic values it at US$75.00. With such a narrow range of valuations, the analysts apparently share similar views on what they think the business is worth.
One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. It's clear from the latest estimates that Carpenter Technology's rate of growth is expected to accelerate meaningfully, with the forecast 5.5% annualised revenue growth to the end of 2024 noticeably faster than its historical growth of 0.5% p.a. over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 4.1% per year. Factoring in the forecast acceleration in revenue, it's pretty clear that Carpenter Technology is expected to grow much faster than its industry.
The Bottom Line
The most important thing to take away is that there's been no major change in sentiment, with the analysts reconfirming that the business is performing in line with their previous earnings per share estimates. Happily, there were no major changes to revenue forecasts, with the business still expected to grow faster than the wider industry. The consensus price target held steady at US$86.00, with the latest estimates not enough to have an impact on their price targets.
With that said, the long-term trajectory of the company's earnings is a lot more important than next year. At Simply Wall St, we have a full range of analyst estimates for Carpenter Technology going out to 2026, and you can see them free on our platform here..
And what about risks? Every company has them, and we've spotted 1 warning sign for Carpenter Technology you should know about.
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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.
