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The second-quarter results for Rogers Corporation (NYSE:ROG) were released last week, making it a good time to revisit its performance. It was not a great result overall. While revenues of US$235m were in line with analyst predictions, earnings were less than expected, missing statutory estimates by 13% to hit US$1.52 per share. 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. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.
Following the latest results, Rogers' five analysts are now forecasting revenues of US$948.8m in 2021. This would be a meaningful 8.2% improvement in sales compared to the last 12 months. Statutory earnings per share are predicted to leap 48% to US$6.49. In the lead-up to this report, the analysts had been modelling revenues of US$946.7m and earnings per share (EPS) of US$7.02 in 2021. The analysts seem to have become a little more negative on the business after the latest results, given the small dip in their earnings per share numbers for next year.
The consensus price target held steady at US$243, with the analysts seemingly voting that their lower forecast earnings are not expected to lead to a lower stock price in the foreseeable future. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. Currently, the most bullish analyst values Rogers at US$280 per share, while the most bearish prices it at US$225. This is a very narrow spread of estimates, implying either that Rogers is an easy company to value, or - more likely - the analysts are relying heavily on some key assumptions.
Of course, another way to look at these forecasts is to place them into context against the industry itself. The analysts are definitely expecting Rogers' growth to accelerate, with the forecast 17% annualised growth to the end of 2021 ranking favourably alongside historical growth of 4.8% per annum over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 7.7% annually. Factoring in the forecast acceleration in revenue, it's pretty clear that Rogers is expected to grow much faster than its industry.
The Bottom Line
The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Rogers. Fortunately, they also reconfirmed their revenue numbers, suggesting sales are tracking in line with expectations - and our data suggests that revenues are expected to grow faster than the wider industry. The consensus price target held steady at US$243, 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 Rogers going out to 2023, and you can see them free on our platform here..
And what about risks? Every company has them, and we've spotted 2 warning signs for Rogers you should know about.
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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