It's been a good week for Regal Beloit Corporation (NYSE:RBC) shareholders, because the company has just released its latest full-year results, and the shares gained 4.6% to US$84.83. It looks like the results were a bit of a negative overall. While revenues of US$3.2b were in line with analyst predictions, statutory earnings were less than expected, missing estimates by 3.2% to hit US$5.66 per share. 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. We thought readers would find it interesting to see analysts' latest (statutory) post-earnings forecasts for next year.
Following last week's earnings report, Regal Beloit's seven analysts are forecasting 2020 revenues to be US$3.19b, approximately in line with the last 12 months. Statutory per-share earnings are expected to be US$5.61, roughly flat on the last 12 months. In the lead-up to this report, analysts had been modelling revenues of US$3.19b and earnings per share (EPS) of US$5.71 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.
There were no changes to revenue or earnings estimates or the price target of US$92.00, suggesting that the company has met expectations in its recent result. 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 Regal Beloit, with the most bullish analyst valuing it at US$100.00 and the most bearish at US$75.00 per share. The narrow spread of estimates could suggest that the business' future is relatively easy to value, or that analysts have a clear view on its prospects.
Zooming out to look at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up both against past performance, and against industry growth estimates. We would highlight that sales are expected to reverse, with the forecast 1.6% revenue decline a notable change from historical growth of 0.7% over the last five years. By contrast, our data suggests that other companies (with analyst coverage) in the same market are forecast to see their revenue grow 2.4% annually for the foreseeable future. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - analysts also expect Regal Beloit to grow slower than the wider market.
The Bottom Line
The most obvious conclusion from these results is that there's been no major change in the business' prospects in recent times, with analysts holding earnings per share steady, in line with previous estimates. On the plus side, there were no major changes to revenue estimates; although analyst forecasts imply revenues will perform worse than the wider market. The consensus price target held steady at US$92.00, 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 Regal Beloit going out to 2021, and you can see them free on our platform here.
You can also view our analysis of Regal Beloit's balance sheet, and whether we think Regal Beloit is carrying too much debt, for free on our platform here.
If you spot an error that warrants correction, please contact the editor at email@example.com. 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. Simply Wall St has no position in the stocks mentioned.
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