It's been a good week for Atkore International Group Inc. (NYSE:ATKR) shareholders, because the company has just released its latest full-year results, and the shares gained 9.3% to US$40.72. Revenues were in line with forecasts, at US$1.9b, although earnings per share came in 13% below what analysts expected, at US$2.83 per share. 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 are forecasting for next year.
Taking into account the latest results, the most recent consensus for Atkore International Group from three analysts is for revenues of US$1.97b in 2020, which is a satisfactory 2.7% increase on its sales over the past 12 months. Earnings per share are expected to leap 31% to US$3.82. Before this earnings report, analysts had been forecasting revenues of US$1.97b and earnings per share (EPS) of US$3.74 in 2020. Analysts seem to have become more bullish on the business, judging by their new earnings per share estimates.
Analysts have been lifting their price targets on the back of the earnings upgrade, with the consensus price target rising 17% to US$38.25. 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. The most optimistic Atkore International Group analyst has a price target of US$41.00 per share, while the most pessimistic values it at US$31.00. The narrow spread of estimates could suggest that the business' future is relatively easy to value, or that analysts have a clear view on its prospects.
It can be useful to take a broader overview by seeing how analyst forecasts compare, both to the Atkore International Group's past performance and to peers in the same market. We can infer from the latest estimates that analysts are expecting a continuation of Atkore International Group's historical trends, as next year's forecast 2.7% revenue growth is roughly in line with 3.0% annual revenue growth over the past five years. Compare this with the wider market, which analyst estimates (in aggregate) suggest will see revenues grow 3.2% next year. So although Atkore International Group is expected to maintain its revenue growth rate, it's only growing at about the rate of the wider market.
The Bottom Line
The most important thing to take away from this is that analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards Atkore International Group following these results. They also reconfirmed their revenue estimates, with the company predicted to grow at about the same rate as the wider market. There was also a nice increase in the price target, with analysts feeling that the intrinsic value of the business is improving.
With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have forecasts for Atkore International Group going out to 2021, and you can see them free on our platform here.
It might also be worth considering whether Atkore International Group's debt load is appropriate, using our debt analysis tools on the Simply Wall St platform, here.
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