Over the last 7 days, the Electrical industry has dropped 5.4%, driven by declines in Eaton and Emerson Electric of 6.1% and 7.0%, respectively. Meanwhile, ESS Tech actually outperformed within the industry, gaining 7.0% in the last week. This takes the industry's 12 month performance to a gain of 26%.
Industry Valuation and Performance
Has the U.S. Electrical Industry valuation changed over the past few years?
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Current Industry PE: Investors are relatively neutral on the industry at the moment, considering it's trading close to its 3-year average PE ratio of 21.0x. It appears they believe that earnings will grow in-line with historical growth rates.
Past Earnings Growth: The earnings for companies in the Electrical industry have remained mostly flat over the last three years, while revenues for these companies have grown 4.7% per year.This means that although more sales are being generated, either the cost of doing business or the level of investment back into businesses has increased and as a result, profits have held steady.
Which industries have driven the changes within the U.S. Electrical industry?
Heavy Electrical Equipment
Industry PE: Investors are most optimistic about the Electrical Components industry, which is trading close to its 3-year average PE ratio of 21.3x. However analysts are expecting annual earnings growth of 21%, which is lower than the prior year's growth of 50% per year. So the market might believe that analysts are underestimating future growth. Meanwhile, investors are most pessimistic about the Heavy Electrical Equipment industry, which is trading below its 3-year average of 19.1x.
Forecasted Growth: Analysts are most optimistic on the Heavy Electrical Equipment industry, expecting annual earnings growth of 40% over the next 5 years. However this is lower than its past earnings growth rate of 303% per year. Meanwhile, the Electrical Components industry is expected to see its earnings grow by 21% per year over the next few years.
Top Stock Gainers and Losers
Which companies have driven the market over the last 7 days?