Ducommun Incorporated Just Beat EPS By 9.6%: Here's What Analysts Think Will Happen Next
Last week, you might have seen that Ducommun Incorporated (NYSE:DCO) released its full-year result to the market. The early response was not positive, with shares down 2.2% to US$49.13 in the past week. Ducommun reported US$757m in revenue, roughly in line with analyst forecasts, although statutory earnings per share (EPS) of US$1.14 beat expectations, being 9.6% higher than what the analysts expected. 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. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.
See our latest analysis for Ducommun
After the latest results, the five analysts covering Ducommun are now predicting revenues of US$797.6m in 2024. If met, this would reflect a modest 5.4% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to bounce 110% to US$2.30. Before this earnings report, the analysts had been forecasting revenues of US$812.6m and earnings per share (EPS) of US$2.36 in 2024. The analysts seem to have become a little more negative on the business after the latest results, given the minor downgrade to their earnings per share numbers for next year.
It might be a surprise to learn that the consensus price target was broadly unchanged at US$64.80, with the analysts clearly implying that the forecast decline in earnings is not expected to have much of an impact on valuation. 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 Ducommun analyst has a price target of US$72.00 per share, while the most pessimistic values it at US$58.00. 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. The analysts are definitely expecting Ducommun's growth to accelerate, with the forecast 5.4% annualised growth to the end of 2024 ranking favourably alongside historical growth of 2.0% per annum 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 6.5% per year. It seems obvious that, while the future growth outlook is brighter than the recent past, Ducommun is expected to grow slower than the wider industry.
The Bottom Line
The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Ducommun. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting that it's tracking in line with expectations. Although our data does suggest that Ducommun's revenue is expected to perform worse than the wider industry. The consensus price target held steady at US$64.80, with the latest estimates not enough to have an impact on their price targets.
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 Ducommun going out to 2025, and you can see them free on our platform here.
You still need to take note of risks, for example - Ducommun has 3 warning signs we think you should be aware of.
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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.
