Brady Corporation (NYSE:BRC) Just Reported Second-Quarter Earnings: Have Analysts Changed Their Mind On The Stock?
Brady Corporation (NYSE:BRC) shareholders are probably feeling a little disappointed, since its shares fell 6.7% to US$57.82 in the week after its latest quarterly results. Results look mixed - while revenue fell marginally short of analyst estimates at US$323m, statutory earnings were in line with expectations, at US$0.90 per share. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.
See our latest analysis for Brady
Following last week's earnings report, Brady's three analysts are forecasting 2024 revenues to be US$1.35b, approximately in line with the last 12 months. Statutory per share are forecast to be US$3.93, approximately in line with the last 12 months. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$1.38b and earnings per share (EPS) of US$3.96 in 2024. So it looks like the analysts have become a bit less optimistic after the latest results announcement, with revenues expected to fall even as the company is supposed to maintain EPS.
The consensus has reconfirmed its price target of US$69.00, showing that the analysts don't expect weaker revenue expectations next year to have a material impact on Brady's market value. 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. There are some variant perceptions on Brady, with the most bullish analyst valuing it at US$73.00 and the most bearish at US$64.00 per share. This is a very narrow spread of estimates, implying either that Brady is an easy company to value, or - more likely - the analysts are relying heavily on some key assumptions.
Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. It's pretty clear that there is an expectation that Brady's revenue growth will slow down substantially, with revenues to the end of 2024 expected to display 1.9% growth on an annualised basis. This is compared to a historical growth rate of 4.1% over the past five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 6.5% per year. So it's pretty clear that, while revenue growth is expected to slow down, the wider industry is also expected to grow faster than Brady.
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. Unfortunately, they also downgraded their revenue estimates, and our data indicates underperformance compared to the wider industry. Even so, earnings per share are more important to the intrinsic value of the business. Even so, earnings per share are more important to the intrinsic value of the business. 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. We have estimates - from multiple Brady analysts - going out to 2025, and you can see them free on our platform here.
Another thing to consider is whether management and directors have been buying or selling stock recently. We provide an overview of all open market stock trades for the last twelve months on our platform, here.
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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.
