TechnipFMC plc (NYSE:FTI) missed earnings with its latest quarterly results, disappointing overly-optimistic analysts. It wasn't a great result overall - while revenue fell marginally short of analyst estimates at US$3.3b, earnings missed forecasts by an incredible 90%, coming in at just US$0.05 per share. 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. We thought readers would find it interesting to see analysts' latest post-earnings forecasts for next year.
After the latest results, the 33 analysts covering TechnipFMC are now predicting revenues of US$15.0b in 2020. If met, this would reflect a decent 15% improvement in sales compared to the last 12 months. TechnipFMC is also expected to turn profitable, with earnings of US$1.48 per share. Yet prior to the latest earnings, analysts had been forecasting revenues of US$15.0b and earnings per share (EPS) of US$1.48 in 2020. So it's pretty clear that, although analysts have updated their estimates, there's been no major change in expectations for the business following the latest results.
It will come as no surprise then, to learn that the consensus price target is largely unchanged at US$30.09. 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 TechnipFMC, with the most bullish analyst valuing it at US$43.00 and the most bearish at US$16.80 per share. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the business.
Further, we can compare these estimates to past performance, and see how TechnipFMC forecasts compare to the wider market's forecast performance. Analysts are definitely expecting TechnipFMC's growth to accelerate, with the forecast 15% growth ranking favourably alongside historical growth of 3.8% per annum over the past five years. Compare this with other companies in the same market, which are forecast to grow their revenue 4.7% next year. Factoring in the forecast acceleration in revenue, it's pretty clear that TechnipFMC is expected to grow much faster than its market.
The Bottom Line
The most important thing to take away is that there's been no major change in sentiment, with analysts reconfirming that earnings per share are expected to continue performing in line with their prior expectations. Fortunately, analysts also reconfirmed their revenue estimates, suggesting sales are tracking in line with expectations - and our data does suggest that TechnipFMC's revenues are expected to grow faster than the wider market. The consensus price target held steady at US$30.09, with the latest estimates not enough to have an impact on analysts' estimated valuations.
With that in mind, we wouldn't be too quick to come to a conclusion on TechnipFMC. Long-term earnings power is much more important than next year's profits. At Simply Wall St, we have a full range of analyst estimates for TechnipFMC going out to 2023, and you can see them free on our platform here..
We also provide an overview of the TechnipFMC Board and CEO remuneration and length of tenure at the company, and whether insiders have been buying the stock, here.
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