The Powell Industries, Inc. (NASDAQ:POWL) Analyst Just Boosted Their Forecasts By A Meaningful Amount
Celebrations may be in order for Powell Industries, Inc. (NASDAQ:POWL) shareholders, with the covering analyst delivering a significant upgrade to their statutory estimates for the company. The consensus statutory numbers for both revenue and earnings per share (EPS) increased, with their view clearly much more bullish on the company's business prospects. The market may be pricing in some blue sky too, with the share price gaining 36% to US$82.50 in the last 7 days. Could this upgrade be enough to drive the stock even higher?
Following the upgrade, the current consensus from Powell Industries' solo analyst is for revenues of US$751m in 2024 which - if met - would reflect a notable 15% increase on its sales over the past 12 months. Statutory earnings per share are presumed to leap 25% to US$3.87. Prior to this update, the analyst had been forecasting revenues of US$679m and earnings per share (EPS) of US$2.60 in 2024. So we can see there's been a pretty clear increase in analyst sentiment in recent times, with both revenues and earnings per share receiving a decent lift in the latest estimates.
Check out our latest analysis for Powell Industries
It will come as no surprise to learn that the analyst has increased their price target for Powell Industries 51% to US$71.00 on the back of these upgrades.
Of course, another way to look at these forecasts is to place them into context against the industry itself. The analyst is definitely expecting Powell Industries' growth to accelerate, with the forecast 12% annualised growth to the end of 2024 ranking favourably alongside historical growth of 3.8% per annum over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 7.7% per year. Factoring in the forecast acceleration in revenue, it's pretty clear that Powell Industries is expected to grow much faster than its industry.
The Bottom Line
The most important thing to take away from this upgrade is that the analyst upgraded their earnings per share estimates for next year, expecting improving business conditions. They also upgraded their revenue estimates for next year, and sales are expected to grow faster than the wider market. With a serious upgrade to expectations and a rising price target, it might be time to take another look at Powell Industries.
Still, the long-term prospects of the business are much more relevant than next year's earnings. At least one analyst has provided forecasts out to 2025, which can be seen for free on our platform here.
Another way to search for interesting companies that could be reaching an inflection point is to track whether management are buying or selling, with our free list of growing companies that insiders are buying.
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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.
