Yahoo Finance Nordson Corporation (NASDAQ:NDSN) Just Released Its Second-Quarter Results And Analysts Are Updating Their Estimates
It's been a mediocre week for Nordson Corporation (NASDAQ:NDSN) shareholders, with the stock dropping 10% to US$243 in the week since its latest quarterly results. Results look mixed - while revenue fell marginally short of analyst estimates at US$651m, statutory earnings were in line with expectations, at US$2.05 per share. 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. 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 Nordson
Following last week's earnings report, Nordson's ten analysts are forecasting 2024 revenues to be US$2.65b, approximately in line with the last 12 months. Per-share earnings are expected to accumulate 3.0% to US$8.70. Before this earnings report, the analysts had been forecasting revenues of US$2.77b and earnings per share (EPS) of US$9.14 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.
Despite the cuts to forecast earnings, there was no real change to the US$276 price target, showing that the analysts don't think the changes have a meaningful impact on its intrinsic value. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. Currently, the most bullish analyst values Nordson at US$315 per share, while the most bearish prices it at US$233. Even so, with a relatively close grouping of estimates, it looks like the analysts are quite confident in their valuations, suggesting Nordson is an easy business to forecast or the the analysts are all using similar assumptions.
Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. It's pretty clear that there is an expectation that Nordson's revenue growth will slow down substantially, with revenues to the end of 2024 expected to display 0.01% growth on an annualised basis. This is compared to a historical growth rate of 5.1% over the past five years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 3.7% annually. So it's pretty clear that, while revenue growth is expected to slow down, the wider industry is also expected to grow faster than Nordson.
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. The consensus price target held steady at US$276, with the latest estimates not enough to have an impact on their price targets.
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 forecasts for Nordson going out to 2026, and you can see them free on our platform here.
You should always think about risks though. Case in point, we've spotted 1 warning sign for Nordson you should be aware of.
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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.
