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WESCO International, Inc. Just Beat Earnings Expectations: Here's What Analysts Think Will Happen Next

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WESCO International, Inc. (NYSE:WCC) defied analyst predictions to release its third-quarter results, which were ahead of market expectations. It was overall a positive result, with revenues beating expectations by 2.1% to hit US$4.1b. WESCO International reported statutory earnings per share (EPS) US$1.31, which was a notable 12% above what the analysts had forecast. 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. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.

Check out our latest analysis for WESCO International

earnings-and-revenue-growth
earnings-and-revenue-growth

Following the latest results, WESCO International's twelve analysts are now forecasting revenues of US$16.7b in 2021. This would be a huge 63% improvement in sales compared to the last 12 months. Statutory earnings per share are predicted to soar 121% to US$5.93. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$16.6b and earnings per share (EPS) of US$5.77 in 2021. So the consensus seems to have become somewhat more optimistic on WESCO International's earnings potential following these results.

The analysts have been lifting their price targets on the back of the earnings upgrade, with the consensus price target rising 12% to US$69.17. 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 WESCO International analyst has a price target of US$100.00 per share, while the most pessimistic values it at US$45.00. Note the wide gap in analyst price targets? This implies to us that there is a fairly broad range of possible scenarios for the underlying business.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the WESCO International's past performance and to peers in the same industry. The analysts are definitely expecting WESCO International's growth to accelerate, with the forecast 63% growth ranking favourably alongside historical growth of 4.2% per annum over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 4.6% per year. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect WESCO International to grow faster than the wider industry.

The Bottom Line

The most important thing here is that the analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards WESCO International following these results. 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.

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. We have estimates - from multiple WESCO International analysts - going out to 2024, and you can see them free on our platform here.

Even so, be aware that WESCO International is showing 5 warning signs in our investment analysis , and 1 of those is potentially serious...

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@simplywallst.com.

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