John Bean Technologies Corporation (NYSE:JBT) investors will be delighted, with the company turning in some strong numbers with its latest results. It was overall a positive result, with revenues beating expectations by 3.8% to hit US$412m. John Bean Technologies also reported a statutory profit of US$1.01, which was an impressive 42% above what the analysts had forecast. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.
Taking into account the latest results, the current consensus, from the nine analysts covering John Bean Technologies, is for revenues of US$1.71b in 2020, which would reflect a chunky 10% reduction in John Bean Technologies' sales over the past 12 months. Statutory earnings per share are forecast to sink 15% to US$3.66 in the same period. In the lead-up to this report, the analysts had been modelling revenues of US$1.70b and earnings per share (EPS) of US$3.34 in 2020. So the consensus seems to have become somewhat more optimistic on John Bean Technologies' earnings potential following these results.
The analysts have been lifting their price targets on the back of the earnings upgrade, with the consensus price target rising 6.5% to US$95.63. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. The most optimistic John Bean Technologies analyst has a price target of US$110 per share, while the most pessimistic values it at US$65.00. There are definitely some different views on the stock, but the range of estimates is not wide enough as to imply that the situation is unforecastable, in our view.
Of course, another way to look at these forecasts is to place them into context against the industry itself. These estimates imply that sales are expected to slow, with a forecast revenue decline of 10%, a significant reduction from annual growth of 14% over the last five years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 7.5% annually for the foreseeable future. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - John Bean Technologies is expected to lag the wider industry.
The Bottom Line
The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around John Bean Technologies' earnings potential next year. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting sales are tracking in line with expectations - although our data does suggest that John Bean Technologies' revenues are expected to perform worse than the wider industry. There was also a nice increase in the price target, with the analysts clearly feeling that the intrinsic value of the business is improving.
With that in mind, we wouldn't be too quick to come to a conclusion on John Bean Technologies. Long-term earnings power is much more important than next year's profits. We have forecasts for John Bean Technologies going out to 2022, and you can see them free on our platform here.
You still need to take note of risks, for example - John Bean Technologies has 2 warning signs we think you should be aware of.
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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