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It's been a good week for Hubbell Incorporated (NYSE:HUBB) shareholders, because the company has just released its latest annual results, and the shares gained 2.9% to US$147. Hubbell reported US$4.6b in revenue, roughly in line with analyst forecasts, although statutory earnings per share (EPS) of US$7.31 beat expectations, being 3.6% higher than what analysts expected. 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 Hubbell after the latest results.
Following the latest results, Hubbell's nine analysts are now forecasting revenues of US$4.70b in 2020. This would be a satisfactory 2.3% improvement in sales compared to the last 12 months. Statutory earnings per share are expected to rise 7.9% to US$7.92. Before this earnings report, analysts had been forecasting revenues of US$4.76b and earnings per share (EPS) of US$7.80 in 2020. The consensus analysts don't seem to have seen anything in these results that would have changed their view on the business, given there's been no major change to their estimates.
It will come as no surprise then, to learn that the consensus price target is largely unchanged at US$158. 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. The most optimistic Hubbell analyst has a price target of US$177 per share, while the most pessimistic values it at US$145. 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. It's pretty clear that analysts expect Hubbell's revenue growth will slow down substantially, with revenues next year expected to grow 2.3%, compared to a historical growth rate of 7.5% over the past five years. Juxtapose this against the other companies in the market with analyst coverage, which are forecast to grow their revenues (in aggregate) 2.7% next year. Factoring in the forecast slowdown in growth, it looks like analysts are expecting Hubbell to grow at about the same rate as the wider market.
The Bottom Line
The most important thing to take away is that there's been no major change in sentiment, with analysts reconfirming that earnings per share are expected to continue performing in line with their prior expectations. Happily, there were no real changes to sales forecasts, with the business still expected to grow in line with the overall market. The consensus price target held steady at US$158, with the latest estimates not enough to have an impact on analysts' estimated valuations.
With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have forecasts for Hubbell going out to 2024, and you can see them free on our platform here.
You can also view our analysis of Hubbell's balance sheet, and whether we think Hubbell is carrying too much debt, for free on our platform here.
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