Yahoo Finance Simpson Manufacturing Co., Inc. Just Missed EPS By 5.5%: Here's What Analysts Think Will Happen Next
Last week, you might have seen that Simpson Manufacturing Co., Inc. (NYSE:SSD) released its quarterly result to the market. The early response was not positive, with shares down 3.4% to US$178 in the past week. Revenues of US$597m were in line with forecasts, although statutory earnings per share (EPS) came in below expectations at US$2.31, missing estimates by 5.5%. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.
Check out our latest analysis for Simpson Manufacturing
Taking into account the latest results, Simpson Manufacturing's three analysts currently expect revenues in 2024 to be US$2.23b, approximately in line with the last 12 months. Per-share earnings are expected to increase 2.2% to US$8.05. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$2.27b and earnings per share (EPS) of US$8.35 in 2024. So it looks like there's been a small decline in overall sentiment after the recent results - there's been no major change to revenue estimates, but the analysts did make a small dip in their earnings per share forecasts.
It might be a surprise to learn that the consensus price target was broadly unchanged at US$192, with the analysts clearly implying that the forecast decline in earnings is not expected to have much of an impact on valuation. 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. There are some variant perceptions on Simpson Manufacturing, with the most bullish analyst valuing it at US$202 and the most bearish at US$180 per share. Even so, with a relatively close grouping of estimates, it looks like the analysts are quite confident in their valuations, suggesting Simpson Manufacturing is an easy business to forecast or the the analysts are all using similar assumptions.
These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Simpson Manufacturing's past performance and to peers in the same industry. We would highlight that Simpson Manufacturing's revenue growth is expected to slow, with the forecast 1.8% annualised growth rate until the end of 2024 being well below the historical 17% p.a. growth over the last five years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 5.5% annually. Factoring in the forecast slowdown in growth, it seems obvious that Simpson Manufacturing is also expected to grow slower than other industry participants.
The Bottom Line
The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Simpson Manufacturing. On the plus side, there were no major changes to revenue estimates; although forecasts imply they will perform worse than the wider industry. The consensus price target held steady at US$192, with the latest estimates not enough to have an impact on their price targets.
Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have forecasts for Simpson Manufacturing going out to 2025, and you can see them free on our platform here.
It is also worth noting that we have found 1 warning sign for Simpson Manufacturing that you need to take into consideration.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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@simplywallst.com
