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Avient Corporation Just Beat Analyst Forecasts, And Analysts Have Been Updating Their Predictions

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Simply Wall St
·3 min read
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Avient Corporation (NYSE:AVNT) investors will be delighted, with the company turning in some strong numbers with its latest results. The company beat both earnings and revenue forecasts, with revenue of US$3.2b, some 2.4% above estimates, and statutory earnings per share (EPS) coming in at US$1.45, 40% ahead of expectations. 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. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.

View our latest analysis for Avient

earnings-and-revenue-growth
earnings-and-revenue-growth

Following the latest results, Avient's nine analysts are now forecasting revenues of US$4.09b in 2021. This would be a substantial 26% improvement in sales compared to the last 12 months. Per-share earnings are expected to bounce 50% to US$2.20. Before this earnings report, the analysts had been forecasting revenues of US$3.91b and earnings per share (EPS) of US$1.90 in 2021. There's been a pretty noticeable increase in sentiment, with the analysts upgrading revenues and making a nice gain to earnings per share in particular.

With these upgrades, we're not surprised to see that the analysts have lifted their price target 13% to US$51.11per share. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. The most optimistic Avient analyst has a price target of US$56.00 per share, while the most pessimistic values it at US$42.00. With such a narrow range of valuations, the analysts apparently share similar views on what they think the business is worth.

Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. For example, we noticed that Avient's rate of growth is expected to accelerate meaningfully, with revenues forecast to grow 26%, well above its historical decline of 1.3% a year over the past five years. Compare this against analyst estimates for the wider industry, which suggest that (in aggregate) industry revenues are expected to grow 6.3% next year. So it looks like Avient is expected to grow faster than its competitors, at least for a while.

The Bottom Line

The most important thing here is that the analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards Avient following these results. Pleasantly, they also upgraded their revenue estimates, and their forecasts suggest the business is expected to grow faster than the wider industry. There was also a nice increase in the price target, with the analysts clearly feeling that the intrinsic value of the business is improving.

Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. We have forecasts for Avient going out to 2025, and you can see them free on our platform here.

And what about risks? Every company has them, and we've spotted 3 warning signs for Avient (of which 1 is concerning!) you should know about.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.