EMCOR Group, Inc. Just Beat EPS By 7.2%: Here's What Analysts Think Will Happen Next
Shareholders of EMCOR Group, Inc. (NYSE:EME) will be pleased this week, given that the stock price is up 16% to US$314 following its latest annual results. The result was positive overall - although revenues of US$13b were in line with what the analysts predicted, EMCOR Group surprised by delivering a statutory profit of US$13.31 per share, modestly greater than expected. The 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. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on EMCOR Group after the latest results.
See our latest analysis for EMCOR Group
Following the latest results, EMCOR Group's three analysts are now forecasting revenues of US$13.7b in 2024. This would be a decent 8.9% improvement in revenue compared to the last 12 months. Per-share earnings are expected to increase 4.2% to US$14.02. Before this earnings report, the analysts had been forecasting revenues of US$13.6b and earnings per share (EPS) of US$13.06 in 2024. The analysts seems to have become more bullish on the business, judging by their new earnings per share estimates.
The consensus price target rose 26% to US$305, suggesting that higher earnings estimates flow through to the stock's valuation as well. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. There are some variant perceptions on EMCOR Group, with the most bullish analyst valuing it at US$375 and the most bearish at US$235 per share. There are definitely some different views on the stock, but the range of estimates is not wide enough as to imply that the situation is unforecastable, in our view.
One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. We can infer from the latest estimates that forecasts expect a continuation of EMCOR Group'shistorical trends, as the 8.9% annualised revenue growth to the end of 2024 is roughly in line with the 7.9% annual growth over the past five years. Compare this with the broader industry, which analyst estimates (in aggregate) suggest will see revenues grow 7.7% annually. It's clear that while EMCOR Group's revenue growth is expected to continue on its current trajectory, it's only expected to grow in line with the industry itself.
The Bottom Line
The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around EMCOR Group's earnings potential next year. They also reconfirmed their revenue estimates, with the company predicted to grow at about the same rate as 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.
With that in mind, we wouldn't be too quick to come to a conclusion on EMCOR Group. Long-term earnings power is much more important than next year's profits. We have forecasts for EMCOR Group going out to 2026, and you can see them free on our platform here.
We also provide an overview of the EMCOR Group Board and CEO remuneration and length of tenure at the company, and whether insiders have been buying the stock, here.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
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.
