Yahoo Finance Atkore Inc. Just Beat Analyst Forecasts, And Analysts Have Been Updating Their Predictions
It's been a mediocre week for Atkore Inc. (NYSE:ATKR) shareholders, with the stock dropping 10% to US$158 in the week since its latest quarterly results. It looks like a credible result overall - although revenues of US$793m were in line with what the analysts predicted, Atkore surprised by delivering a statutory profit of US$3.67 per share, a notable 12% above expectations. The 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. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Atkore after the latest results.
View our latest analysis for Atkore
Following last week's earnings report, Atkore's five analysts are forecasting 2024 revenues to be US$3.38b, approximately in line with the last 12 months. Statutory earnings per share are expected to dip 9.8% to US$15.09 in the same period. Before this earnings report, the analysts had been forecasting revenues of US$3.53b and earnings per share (EPS) of US$15.45 in 2024. The analysts are less bullish than they were before these results, given the reduced revenue forecasts and the small dip in earnings per share expectations.
The analysts made no major changes to their price target of US$193, suggesting the downgrades are not expected to have a long-term impact on Atkore's 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. Currently, the most bullish analyst values Atkore at US$200 per share, while the most bearish prices it at US$183. With such a narrow range of valuations, the analysts apparently share similar views on what they think the business is worth.
One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. These estimates imply that revenue is expected to slow, with a forecast annualised decline of 0.2% by the end of 2024. This indicates a significant reduction from annual growth of 18% over the last five years. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 7.6% per year. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Atkore is expected to lag the wider industry.
The Bottom Line
The most important thing to take away is that the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. Unfortunately, they also downgraded their revenue estimates, and our data indicates underperformance compared to the wider industry. Even so, earnings per share are more important to the intrinsic value of the business. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.
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 Atkore going out to 2026, and you can see them free on our platform here.
It is also worth noting that we have found 2 warning signs for Atkore (1 is potentially serious!) that you need to take into consideration.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
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.
