PHINIA Inc. Just Missed EPS By 73%: Here's What Analysts Think Will Happen Next

The analysts might have been a bit too bullish on PHINIA Inc. (NYSE:PHIN), given that the company fell short of expectations when it released its second-quarter results last week. It wasn't a great result overall - while revenue fell marginally short of analyst estimates at US$868m, statutory earnings missed forecasts by an incredible 73%, coming in at just US$0.31 per share. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.

View our latest analysis for PHINIA

Taking into account the latest results, the current consensus, from the two analysts covering PHINIA, is for revenues of US$3.44b in 2024. This implies a noticeable 2.1% reduction in PHINIA's revenue over the past 12 months. Per-share earnings are expected to bounce 86% to US$3.19. In the lead-up to this report, the analysts had been modelling revenues of US$3.51b and earnings per share (EPS) of US$3.94 in 2024. The analysts seem to have become more bearish following the latest results. While there were no changes to revenue forecasts, there was a real cut to EPS estimates.

Despite cutting their earnings forecasts,the analysts have lifted their price target 7.1% to US$52.50, suggesting that these impacts are not expected to weigh on the stock's value in the long term.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the PHINIA's past performance and to peers in the same industry. We would highlight that revenue is expected to reverse, with a forecast 4.1% annualised decline to the end of 2024. That is a notable change from historical growth of 2.2% over the last year. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 10% annually for the foreseeable future. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - PHINIA is expected to lag the wider industry.

The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for PHINIA. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting that it's tracking in line with expectations. Although our data does suggest that PHINIA's revenue is expected to perform worse than the wider industry. There was also a nice increase in the price target, with the analysts clearly feeling that the intrinsic value of the business is improving.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. At least one analyst has provided forecasts out to 2026, which can be seen for free on our platform here.

We don't want to rain on the parade too much, but we did also find 3 warning signs for PHINIA that you need to be mindful 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.

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