Last week, you might have seen that Herman Miller, Inc. (NASDAQ:MLHR) released its quarterly result to the market. The early response was not positive, with shares down 5.5% to US$43.81 in the past week. Revenues of US$674m fell slightly short of expectations, but earnings were a definite bright spot, with statutory per-share profits of US$1.32 an impressive 52% ahead of estimates. Earnings are an important time for investors, as they can track a company's performance, look at what top analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether analysts have changed their mind on Herman Miller after the latest results.
Taking into account the latest results, the current consensus from Herman Miller's only analyst is for revenues of US$2.76b in 2020, which would reflect a reasonable 4.7% increase on its sales over the past 12 months. Statutory earnings per share are expected to increase 3.0% to US$3.71. Before this earnings report, analysts had been forecasting revenues of US$2.75b and earnings per share (EPS) of US$3.38 in 2020. So the consensus seems to have become somewhat more optimistic on Herman Miller's earnings potential following these results.
The consensus price target was unchanged at US$43.00, implying that the improved earnings outlook is not expected to have a long term impact on value creation for shareholders.
In addition, we can look to Herman Miller's past performance and see whether business is expected to improve, and if the company is expected to perform better than wider market. We can infer from the latest estimates that analysts are expecting a continuation of Herman Miller's historical trends, as next year's forecast 4.7% revenue growth is roughly in line with 4.4% annual revenue growth over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenues grow 5.7% per year. So it's pretty clear that Herman Miller is expected to grow slower than similar companies in the same market.
The Bottom Line
The biggest takeaway for us from these new estimates is that the consensus upgraded its earnings per share estimates, showing a clear improvement in sentiment around Herman Miller's earnings potential next year. On the plus side, there were no major changes to revenue estimates; although analyst forecasts imply revenues will perform worse than the wider market. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.
Even so, the longer term trajectory of the business is much more important for the value creation of shareholders. We have analyst estimates for Herman Miller going out as far as 2021, and you can see them free on our platform here.
You can also see whether Herman Miller is carrying too much debt, and whether its balance sheet is healthy, for free on our platform here.
If you spot an error that warrants correction, please contact the editor at firstname.lastname@example.org. 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. Simply Wall St has no position in the stocks mentioned.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Thank you for reading.