Analysts Are Updating Their Franklin Electric Co., Inc. (NASDAQ:FELE) Estimates After Its First-Quarter Results

It's shaping up to be a tough period for Franklin Electric Co., Inc. (NASDAQ:FELE), which a week ago released some disappointing first-quarter results that could have a notable impact on how the market views the stock. Franklin Electric missed analyst forecasts, with revenues of US$461m and statutory earnings per share (EPS) of US$0.70, falling short by 2.7% and 3.2% respectively. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.

View our latest analysis for Franklin Electric

Taking into account the latest results, the consensus forecast from Franklin Electric's five analysts is for revenues of US$2.11b in 2024. This reflects a credible 3.2% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to accumulate 4.6% to US$4.27. Before this earnings report, the analysts had been forecasting revenues of US$2.12b and earnings per share (EPS) of US$4.30 in 2024. So it's pretty clear that, although the analysts have updated their estimates, there's been no major change in expectations for the business following the latest results.

There were no changes to revenue or earnings estimates or the price target of US$103, suggesting that the company has met expectations in its recent result. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. There are some variant perceptions on Franklin Electric, with the most bullish analyst valuing it at US$110 and the most bearish at US$90.00 per share. This is a very narrow spread of estimates, implying either that Franklin Electric is an easy company to value, or - more likely - the analysts are relying heavily on some key assumptions.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Franklin Electric's past performance and to peers in the same industry. It's pretty clear that there is an expectation that Franklin Electric's revenue growth will slow down substantially, with revenues to the end of 2024 expected to display 4.2% growth on an annualised basis. This is compared to a historical growth rate of 13% over the past five years. Compare this to the 175 other companies in this industry with analyst coverage, which are forecast to grow their revenue at 3.6% per year. So it's pretty clear that, while Franklin Electric's revenue growth is expected to slow, it's expected to grow roughly in line with the industry.

The Bottom Line

The most obvious conclusion is that there's been no major change in the business' prospects in recent times, with the analysts holding their earnings forecasts steady, in line with previous estimates. They also reconfirmed their revenue estimates, with the company predicted to grow at about the same rate as the wider industry. 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.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. At Simply Wall St, we have a full range of analyst estimates for Franklin Electric going out to 2025, and you can see them free on our platform here..

It is also worth noting that we have found 1 warning sign for Franklin Electric that you need to take into consideration.

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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.