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Here's What Analysts Are Forecasting For Hill-Rom Holdings, Inc. (NYSE:HRC) After Its Full-Year Results

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Simply Wall St
·4 min read
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It's been a good week for Hill-Rom Holdings, Inc. (NYSE:HRC) shareholders, because the company has just released its latest yearly results, and the shares gained 7.0% to US$94.64. Hill-Rom Holdings reported US$2.9b in revenue, roughly in line with analyst forecasts, although statutory earnings per share (EPS) of US$3.32 beat expectations, being 2.3% higher than what the analysts 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. 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 Hill-Rom Holdings

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Taking into account the latest results, the current consensus, from the eight analysts covering Hill-Rom Holdings, is for revenues of US$2.78b in 2021, which would reflect a measurable 3.7% reduction in Hill-Rom Holdings' sales over the past 12 months. Statutory earnings per share are predicted to increase 9.4% to US$3.66. Before this earnings report, the analysts had been forecasting revenues of US$2.82b and earnings per share (EPS) of US$3.50 in 2021. The analysts seems to have become more bullish on the business, judging by their new earnings per share estimates.

The consensus price target was unchanged at US$114, implying that the improved earnings outlook is not expected to have a long term impact on value creation for shareholders. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. Currently, the most bullish analyst values Hill-Rom Holdings at US$125 per share, while the most bearish prices it at US$105. The narrow spread of estimates could suggest that the business' future is relatively easy to value, or thatthe analysts have a strong view on its prospects.

Of course, another way to look at these forecasts is to place them into context against the industry itself. We would highlight that sales are expected to reverse, with the forecast 3.7% revenue decline a notable change from historical growth of 5.3% over the last five years. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 9.9% next year. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Hill-Rom Holdings is expected to lag the wider industry.

The Bottom Line

The most important thing here is that the analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards Hill-Rom Holdings following these results. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting sales are tracking in line with expectations - although our data does suggest that Hill-Rom Holdings' revenues are expected to perform worse than the wider industry. The consensus price target held steady at US$114, with the latest estimates not enough to have an impact on their price targets.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have forecasts for Hill-Rom Holdings going out to 2024, and you can see them free on our platform here.

You should always think about risks though. Case in point, we've spotted 1 warning sign for Hill-Rom Holdings you should be aware of.

This article by Simply Wall St is general in nature. 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com.