Ingevity Corporation Just Recorded A 64% EPS Beat: Here's What Analysts Are Forecasting Next
Ingevity Corporation (NYSE:NGVT) just released its quarterly report and things are looking bullish. It was overall a positive result, with revenues beating expectations by 5.9% to hit US$332m. Ingevity also reported a statutory profit of US$1.69, which was an impressive 64% above what the analysts had forecast. 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. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.
Check out our latest analysis for Ingevity
Taking into account the latest results, the most recent consensus for Ingevity from eight analysts is for revenues of US$1.27b in 2021 which, if met, would be a reasonable 6.1% increase on its sales over the past 12 months. Statutory earnings per share are predicted to swell 19% to US$4.83. Before this earnings report, the analysts had been forecasting revenues of US$1.27b and earnings per share (EPS) of US$4.82 in 2021. So it's pretty clear that, although the analysts have updated their estimates, there's been no major change in expectations for the business following the latest results.
The analysts reconfirmed their price target of US$71.63, showing that the business is executing well and in line with expectations. 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. The most optimistic Ingevity analyst has a price target of US$90.00 per share, while the most pessimistic values it at US$60.00. 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 Ingevity shareholders.
Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. We would highlight that Ingevity's revenue growth is expected to slow, with forecast 6.1% increase next year well below the historical 7.7%p.a. growth over the last five years. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 5.5% next year. So it's pretty clear that, while Ingevity's revenue growth is expected to slow, it's expected to grow roughly in line with the 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, there were no real changes to sales forecasts, with the business still expected to grow in line with the overall industry. The consensus price target held steady at US$71.63, with the latest estimates not enough to have an impact on their price targets.
With that in mind, we wouldn't be too quick to come to a conclusion on Ingevity. Long-term earnings power is much more important than next year's profits. At Simply Wall St, we have a full range of analyst estimates for Ingevity going out to 2022, and you can see them free on our platform here..
Plus, you should also learn about the 1 warning sign we've spotted with Ingevity .
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.
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