- Oops!Something went wrong.Please try again later.
It's been a pretty great week for Spirit AeroSystems Holdings, Inc. (NYSE:SPR) shareholders, with its shares surging 10% to US$43.38 in the week since its latest yearly results. It was a pretty bad result overall; while revenues were in line with expectations at US$3.4b, statutory losses exploded to US$8.38 per share. 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. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.
Taking into account the latest results, the current consensus from Spirit AeroSystems Holdings' 16 analysts is for revenues of US$4.05b in 2021, which would reflect a decent 19% increase on its sales over the past 12 months. Losses are predicted to fall substantially, shrinking 72% to US$2.33. Yet prior to the latest earnings, the analysts had been forecasting revenues of US$4.07b and losses of US$2.26 per share in 2021. So it's pretty clear consensus is mixed on Spirit AeroSystems Holdings after the new consensus numbers; while the analysts held their revenue numbers steady, they also administered a pronounced increase to per-share loss expectations.
Despite expectations of heavier losses next year,the analysts have lifted their price target 5.7% to US$42.06, perhaps implying these losses are not expected to be recurring over the long term. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. The most optimistic Spirit AeroSystems Holdings analyst has a price target of US$53.00 per share, while the most pessimistic values it at US$18.00. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the business.
Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. For example, we noticed that Spirit AeroSystems Holdings' rate of growth is expected to accelerate meaningfully, with revenues forecast to grow 19%, well above its historical decline of 3.3% a year over the past five years. Compare this against analyst estimates for the wider industry, which suggest that (in aggregate) industry revenues are expected to grow 7.4% next year. Not only are Spirit AeroSystems Holdings' revenues expected to improve, it seems that the analysts are also expecting it to grow faster than the wider industry.
The Bottom Line
The most important thing to note is the forecast of increased losses next year, suggesting all may not be well at Spirit AeroSystems Holdings. 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. We note an upgrade to the price target, suggesting that the analysts believes the intrinsic value of the business is likely to improve over time.
With that in mind, we wouldn't be too quick to come to a conclusion on Spirit AeroSystems Holdings. Long-term earnings power is much more important than next year's profits. We have forecasts for Spirit AeroSystems Holdings going out to 2025, and you can see them free on our platform here.
You still need to take note of risks, for example - Spirit AeroSystems Holdings has 2 warning signs (and 1 which is potentially serious) we think 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.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.