Yahoo Finance Visteon Corporation Just Missed EPS By 6.5%: Here's What Analysts Think Will Happen Next
Visteon Corporation (NASDAQ:VC) shares fell 9.1% to US$76.05 in the week since its latest full-year results. It looks like the results were a bit of a negative overall. While revenues of US$2.9b were in line with analyst predictions, statutory earnings were less than expected, missing estimates by 6.5% to hit US$2.48 per share. Earnings are an important time for investors, as they can track a company's performance, look at what top analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. With this in mind, we've gathered the latest statutory forecasts to see what analysts are expecting for next year.
View our latest analysis for Visteon
Taking into account the latest results, the latest consensus from Visteon's eleven analysts is for revenues of US$3.03b in 2020, which would reflect a satisfactory 3.0% improvement in sales compared to the last 12 months. Statutory earnings per share are expected to surge 25% to US$3.15. In the lead-up to this report, analysts had been modelling revenues of US$3.17b and earnings per share (EPS) of US$4.96 in 2020. Analysts seem less optimistic after the recent results, reducing their sales forecasts and making a pretty serious reduction to earnings per share forecasts.
It'll come as no surprise then, to learn that analysts have cut their price target 6.6% to US$91.40. The consensus price target just an average of individual analyst targets, so - considering that the price target changed, it would be handy to see how wide the range of underlying estimates is. The most optimistic Visteon analyst has a price target of US$105 per share, while the most pessimistic values it at US$52.00. These price targets show that analysts do have some differing views on the business, but the estimates do not vary enough to suggest to us that some are betting on wild success or utter failure.
It can also be useful to step back and take a broader view of how analyst forecasts compare to Visteon's performance in recent years. For example, we noticed that Visteon's rate of growth is expected to accelerate meaningfully, with revenues forecast to grow at 3.0%, well above its historical decline of 0.6% a year over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenue grow 4.5% per year. So although Visteon's revenue growth is expected to improve, it is still expected to grow slower than the market.
The Bottom Line
The most important thing to take away is that analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. Unfortunately, analysts also downgraded their revenue estimates, and our data indicates revenues are expected to perform worse than the wider market. Even so, earnings per share are more important to the intrinsic value of the business. Analysts also downgraded their price target, suggesting that the latest news has led analysts to become more pessimistic about the intrinsic value of the business.
Still, 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 Visteon going out to 2023, and you can see them free on our platform here..
You can also see our analysis of Visteon's Board and CEO remuneration and experience, and whether company insiders have been buying stock.
If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. 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. Simply Wall St has no position in the stocks mentioned.
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