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Last week saw the newest yearly earnings release from Jacobs Engineering Group Inc. (NYSE:J), an important milestone in the company's journey to build a stronger business. It looks like a pretty bad result, all things considered. Although revenues of US$14b were in line with analyst predictions, statutory earnings fell badly short, missing estimates by 27% to hit US$3.20 per share. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.
After the latest results, the ten analysts covering Jacobs Engineering Group are now predicting revenues of US$15.4b in 2022. If met, this would reflect a notable 9.3% improvement in sales compared to the last 12 months. Statutory earnings per share are predicted to surge 96% to US$6.22. Before this earnings report, the analysts had been forecasting revenues of US$15.6b and earnings per share (EPS) of US$6.35 in 2022. The analysts seem to have become a little more negative on the business after the latest results, given the minor downgrade to their earnings per share numbers for next year.
The consensus price target held steady at US$159, with the analysts seemingly voting that their lower forecast earnings are not expected to lead to a lower stock price in the foreseeable future. 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 Jacobs Engineering Group at US$170 per share, while the most bearish prices it at US$149. This is a very narrow spread of estimates, implying either that Jacobs Engineering Group is an easy company to value, or - more likely - the analysts are relying heavily on some key assumptions.
Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. We can infer from the latest estimates that forecasts expect a continuation of Jacobs Engineering Group'shistorical trends, as the 9.3% annualised revenue growth to the end of 2022 is roughly in line with the 9.1% annual revenue growth over the past five years. Juxtapose this against our data, which suggests that other companies (with analyst coverage) in the industry are forecast to see their revenues grow 8.0% per year. So although Jacobs Engineering Group is expected to maintain its revenue growth rate, it's only growing at about the rate of the wider industry.
The Bottom Line
The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Jacobs Engineering Group. 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$159, with the latest estimates not enough to have an impact on their price targets.
Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. At Simply Wall St, we have a full range of analyst estimates for Jacobs Engineering Group going out to 2024, and you can see them free on our platform here..
Plus, you should also learn about the 1 warning sign we've spotted with Jacobs Engineering Group .
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.
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