It's been a sad week for Astronics Corporation (NASDAQ:ATRO), who've watched their investment drop 20% to US$19.69 in the week since the company reported its full-year result. The result was positive overall - although revenues of US$773m were in line with what analysts predicted, Astronics surprised by delivering a statutory profit of US$1.60 per share, modestly greater than expected. This is an important time for investors, as they can track a company's performance in its report, look at what top analysts are forecasting for next year, and see if there has been any change to expectations for the business. So we gathered the latest post-earnings forecasts to see what analysts' statutory forecasts suggest is in store for next year.
Following the recent earnings report, the consensus fromfive analysts covering Astronics expects revenues of US$698.3m in 2020, implying a definite 9.6% decline in sales compared to the last 12 months. Statutory earnings per share are forecast to dive 54% to US$0.75 in the same period. Before this earnings report, analysts had been forecasting revenues of US$719.3m and earnings per share (EPS) of US$0.91 in 2020. From this we can that analyst sentiment has definitely become more bearish after the latest results, leading to lower revenue forecasts and a real cut to earnings per share estimates.
The consensus price target fell 9.0% to US$27.75, with the weaker earnings outlook clearly leading analyst valuation estimates. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. There are some variant perceptions on Astronics, with the most bullish analyst valuing it at US$35.00 and the most bearish at US$19.00 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 Astronics shareholders.
Further, we can compare these estimates to past performance, and see how Astronics forecasts compare to the wider market's forecast performance. We would highlight that sales are expected to reverse, with the forecast 9.6% revenue decline a notable change from historical growth of 3.8% over the last five years. Compare this with our data, which suggests that other companies in the same market are, in aggregate, expected to see their revenue grow 5.3% next year. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - analysts also expect Astronics to grow slower than the wider market.
The Bottom Line
The most important thing to take away is that analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. Unfortunately, analysts also downgraded their revenue estimates, and our data indicates revenues are expected to perform worse than the wider market. Even so, earnings per share are more important to the intrinsic value of the business. The consensus price target fell measurably, with analysts seemingly not reassured by the latest results, leading to a lower estimate of Astronics's future valuation.
With that in mind, we wouldn't be too quick to come to a conclusion on Astronics. Long-term earnings power is much more important than next year's profits. At Simply Wall St, we have a full range of analyst estimates for Astronics going out to 2022, and you can see them free on our platform here..
It might also be worth considering whether Astronics's debt load is appropriate, using our debt analysis tools on the Simply Wall St platform, here.
If you spot an error that warrants correction, please contact the editor at email@example.com. 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. Simply Wall St has no position in the stocks mentioned.
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