Earnings Miss: Franklin Electric Co., Inc. Missed EPS By 7.0% And Analysts Are Revising Their Forecasts

As you might know, Franklin Electric Co., Inc. (NASDAQ:FELE) last week released its latest quarterly, and things did not turn out so great for shareholders. Franklin Electric missed analyst forecasts, with revenues of US$531m and statutory earnings per share (EPS) of US$1.17, falling short by 3.6% and 7.0% respectively. 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. 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

Following the latest results, Franklin Electric's four analysts are now forecasting revenues of US$2.09b in 2025. This would be a modest 4.2% improvement in revenue compared to the last 12 months. Per-share earnings are expected to rise 8.3% to US$4.37. Before this earnings report, the analysts had been forecasting revenues of US$2.17b and earnings per share (EPS) of US$4.58 in 2025. It's pretty clear that pessimism has reared its head after the latest results, leading to a weaker revenue outlook and a small dip in earnings per share estimates.

Despite the cuts to forecast earnings, there was no real change to the US$103 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. The most optimistic Franklin Electric analyst has a price target of US$115 per share, while the most pessimistic values it at US$90.00. Even so, with a relatively close grouping of estimates, it looks like the analysts are quite confident in their valuations, suggesting Franklin Electric is an easy business to forecast or the the analysts are all using similar assumptions.

Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. We would highlight that Franklin Electric's revenue growth is expected to slow, with the forecast 3.3% annualised growth rate until the end of 2025 being well below the historical 12% p.a. growth over the last five years. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 3.0% annually. Factoring in the forecast slowdown in growth, it looks like Franklin Electric is forecast to grow at about the same rate as 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 Franklin Electric. Sadly, they also downgraded their revenue forecasts, but the business is still expected to grow at roughly the same rate as the industry itself. 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. We have forecasts for Franklin Electric going out to 2026, and you can see them free on our platform here.

Another thing to consider is whether management and directors have been buying or selling stock recently. We provide an overview of all open market stock trades for the last twelve months on our platform, here.

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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.