Apergy Corporation Just Missed Earnings And Its EPS Looked Sad - But Analysts Have Updated Their Models
It's been a mediocre week for Apergy Corporation (NYSE:APY) shareholders, with the stock dropping 20% to US$20.68 in the week since its latest full-year results. Statutory earnings per share fell badly short of expectations, coming in at US$0.67, some 24% below analyst forecasts, although revenues were okay, approximately in line with analyst estimates at US$1.1b. This is an important time for investors, as they can track a company's performance in its report, look at what top analysts are forecasting for next year, and see if there has been any change to expectations for the business. With this in mind, we've gathered the latest statutory forecasts to see what analysts are expecting for next year.
Check out our latest analysis for Apergy
Following the recent earnings report, the consensus fromsix analysts covering Apergy expects revenues of US$1.08b in 2020, implying a noticeable 4.6% decline in sales compared to the last 12 months. Statutory per share are forecast to be US$0.67, approximately in line with the last 12 months. Yet prior to the latest earnings, analysts had been forecasting revenues of US$1.12b and earnings per share (EPS) of US$0.94 in 2020. Analysts seem less optimistic after the recent results, reducing their sales forecasts and making a large cut to earnings per share forecasts.
The consensus price target fell 7.7% to US$31.00, with the weaker earnings outlook clearly leading analyst valuation estimates. 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. Currently, the most bullish analyst values Apergy at US$40.00 per share, while the most bearish prices it at US$29.00. There are definitely some different views on the stock, but the range of estimates is not wide enough as to imply that the situation is unforecastable, in our view.
Another way to assess these estimates is by comparing them to past performance, and seeing whether analysts are more or less bullish relative to other companies in the market. We would highlight that sales are expected to reverse, with the forecast 4.6% revenue decline a notable change from historical growth of 12% over the last three years. By contrast, our data suggests that other companies (with analyst coverage) in the same market are forecast to see their revenue grow 3.6% annually for the foreseeable future. It's pretty clear that Apergy's revenues are expected to perform substantially worse than the wider market.
The Bottom Line
The biggest concern with the new estimates is that analysts have reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Apergy. On the negative side, they also downgraded their revenue estimates, and forecasts imply revenues will perform worse than the wider market. 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.
With that in mind, we wouldn't be too quick to come to a conclusion on Apergy. Long-term earnings power is much more important than next year's profits. At Simply Wall St, we have a full range of analyst estimates for Apergy going out to 2023, and you can see them free on our platform here..
You can also view our analysis of Apergy's balance sheet, and whether we think Apergy is carrying too much debt, for free on our platform here.
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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