Earnings Update: Here's Why Analysts Just Lifted Their SPX Technologies, Inc. (NYSE:SPXC) Price Target To US$113
SPX Technologies, Inc. (NYSE:SPXC) came out with its annual results last week, and we wanted to see how the business is performing and what industry forecasters think of the company following this report. It was a credible result overall, with revenues of US$1.7b and statutory earnings per share of US$3.10 both in line with analyst estimates, showing that SPX Technologies is executing in line with expectations. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.
Check out our latest analysis for SPX Technologies
After the latest results, the four analysts covering SPX Technologies are now predicting revenues of US$1.97b in 2024. If met, this would reflect a decent 13% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to leap 48% to US$4.69. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$1.89b and earnings per share (EPS) of US$4.67 in 2024. There doesn't appear to have been a major change in sentiment following the results, other than the slight bump in revenue estimates.
The consensus price target increased 8.7% to US$113, with an improved revenue forecast carrying the promise of a more valuable business, in time. 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. Currently, the most bullish analyst values SPX Technologies at US$125 per share, while the most bearish prices it at US$90.00. Analysts definitely have varying views on the business, but the spread of estimates is not wide enough in our view to suggest that extreme outcomes could await SPX Technologies shareholders.
These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the SPX Technologies' past performance and to peers in the same industry. The analysts are definitely expecting SPX Technologies' growth to accelerate, with the forecast 13% annualised growth to the end of 2024 ranking favourably alongside historical growth of 2.5% 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 3.2% per year. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect SPX Technologies to grow faster than the wider industry.
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. Happily, they also upgraded their revenue estimates, and are forecasting them 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.
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 SPX Technologies analysts - going out to 2025, and you can see them free on our platform here.
It might also be worth considering whether SPX Technologies' debt load is appropriate, using our debt analysis tools on the Simply Wall St 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.
