nVent Electric plc (NYSE:NVT) missed earnings with its latest quarterly results, disappointing overly-optimistic forecasters. nVent Electric missed analyst forecasts, with revenues of US$521m and statutory earnings per share (EPS) of US$1.29, falling short by 2.8% and 7.2% respectively. 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.
Following the recent earnings report, the consensus from five analysts covering nVent Electric is for revenues of US$1.99b in 2020, implying a considerable 8.9% decline in sales compared to the last 12 months. Prior to the latest earnings, the analysts were forecasting revenues of US$2.14b in 2020, and did not provide an earnings per share estimate. The consensus seems a bit less optimistic overall, with the revenue forecasts following the latest results.
There's been no real change to the consensus price target of US$23.60, with nVent Electric seemingly executing in line with expectations. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. There are some variant perceptions on nVent Electric, with the most bullish analyst valuing it at US$26.00 and the most bearish at US$21.00 per share. Still, with such a tight range of estimates, it suggeststhe analysts have a pretty good idea of what they think the company is worth.
Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. One more thing stood out to us about these estimates, and it's the idea that nVent Electric'sdecline is expected to accelerate, with revenues forecast to fall 8.9% next year, topping off a historical decline of 1.2% a year over the past year. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenue grow 1.6% per year. So while a broad number of companies are forecast to decline, unfortunately nVent Electric is expected to see its sales affected worse than other companies in the industry.
The Bottom Line
The most important thing to take away is that the analysts downgraded their revenue estimates for next year. Unfortunately, they also downgraded their revenue estimates, and our data indicates revenues are expected to perform worse than the wider industry. 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.
At least one of nVent Electric's five analysts has provided estimates out to 2024, which can be seen for free on our platform here.
You still need to take note of risks, for example - nVent Electric has 4 warning signs (and 1 which is significant) we think you should know about.
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