Barnes Group Inc. Reported A Surprise Loss, And Analysts Have Updated Their Forecasts

Last week, you might have seen that Barnes Group Inc. (NYSE:B) released its second-quarter result to the market. The early response was not positive, with shares down 7.8% to US$40.02 in the past week. It was a pretty negative result overall, with revenues of US$382m missing analyst predictions by 3.4%. Worse, the business reported a statutory loss of US$0.91 per share, a substantial decline on analyst expectations of a profit. 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. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.

See our latest analysis for Barnes Group

Following last week's earnings report, Barnes Group's five analysts are forecasting 2024 revenues to be US$1.60b, approximately in line with the last 12 months. Earnings are expected to improve, with Barnes Group forecast to report a statutory profit of US$0.29 per share. Before this earnings report, the analysts had been forecasting revenues of US$1.65b and earnings per share (EPS) of US$1.29 in 2024. From this we can that sentiment has definitely become more bearish after the latest results, leading to lower revenue forecasts and a pretty serious reduction to earnings per share estimates.

The analysts made no major changes to their price target of US$46.67, suggesting the downgrades are not expected to have a long-term impact on Barnes Group's valuation. 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. There are some variant perceptions on Barnes Group, with the most bullish analyst valuing it at US$52.00 and the most bearish at US$38.00 per share. Even so, with a relatively close grouping of estimates, it looks like the analysts are quite confident in their valuations, suggesting Barnes Group is an easy business to forecast or the the analysts are all using similar assumptions.

Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. The period to the end of 2024 brings more of the same, according to the analysts, with revenue forecast to display 0.7% growth on an annualised basis. That is in line with its 0.7% annual growth over the past five years. Compare this with the broader industry (in aggregate), which analyst estimates suggest will see revenues grow 3.4% annually. So it's pretty clear that Barnes Group is expected to grow slower than similar companies in the same industry.

The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Barnes Group. On the negative side, they also downgraded their revenue estimates, and forecasts imply they will perform worse than 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.

Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. At Simply Wall St, we have a full range of analyst estimates for Barnes Group going out to 2026, and you can see them free on our platform here..

Don't forget that there may still be risks. For instance, we've identified 2 warning signs for Barnes Group that you should be aware of.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com