Albany International Corp. (NYSE:AIN) last week reported its latest full-year results, which makes it a good time for investors to dive in and see if the business is performing in line with expectations. The result was positive overall - although revenues of US$1.1b were in line with what analysts predicted, Albany International surprised by delivering a statutory profit of US$4.10 per share, modestly greater than expected. Analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. With this in mind, we've gathered the latest statutory forecasts to see what analysts are expecting for next year.
Following the recent earnings report, the consensus fromfour analysts covering Albany International expects revenues of US$1.00b in 2020, implying a perceptible 5.1% decline in sales compared to the last 12 months. Statutory earnings per share are expected to plunge 23% to US$3.18 in the same period. Yet prior to the latest earnings, analysts had been forecasting revenues of US$1.06b and earnings per share (EPS) of US$3.81 in 2020. Analysts seem less optimistic after the recent results, reducing their sales forecasts and making a substantial drop in earnings per share forecasts.
It'll come as no surprise then, to learn that analysts have cut their price target 5.8% to US$79.50. The consensus price target just an average of individual analyst targets, so - considering that the price target changed, it would be handy to see how wide the range of underlying estimates is. There are some variant perceptions on Albany International, with the most bullish analyst valuing it at US$93.00 and the most bearish at US$76.00 per share. Still, with such a tight range of estimates, it suggests analysts have a pretty good idea of what they think the company is worth.
Another way to assess these estimates is by comparing them to past performance, and seeing whether analysts are more or less bullish relative to other companies in the market. We would highlight that sales are expected to reverse, with the forecast 5.1% revenue decline a notable change from historical growth of 8.9% 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 1.5% next year. It's pretty clear that Albany International's revenues are expected to perform substantially worse than the wider market.
The Bottom Line
The biggest concern with the new estimates is that analysts have reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Albany International. 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 Albany International's future valuation.
Even so, the longer term trajectory of the business is much more important for the value creation of shareholders. We have estimates - from multiple Albany International analysts - going out to 2023, and you can see them free on our platform here.
You can also view our analysis of Albany International's balance sheet, and whether we think Albany International is carrying too much debt, for free on our platform here.
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