Hubbell Incorporated (NYSE:HUBB) Just Released Its Second-Quarter Results And Analysts Are Updating Their Estimates

It's been a pretty great week for Hubbell Incorporated (NYSE:HUBB) shareholders, with its shares surging 11% to US$396 in the week since its latest second-quarter results. Revenues came in 2.1% below expectations, at US$1.5b. Statutory earnings per share were relatively better off, with a per-share profit of US$3.94 being roughly in line with analyst estimates. 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.

Check out our latest analysis for Hubbell

Following the latest results, Hubbell's eleven analysts are now forecasting revenues of US$5.79b in 2024. This would be a reasonable 3.9% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to increase 7.8% to US$14.67. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$5.86b and earnings per share (EPS) of US$14.08 in 2024. So the consensus seems to have become somewhat more optimistic on Hubbell's earnings potential following these results.

There's been no major changes to the consensus price target of US$414, suggesting that the improved earnings per share outlook is not enough to have a long-term positive impact on the stock's valuation. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. Currently, the most bullish analyst values Hubbell at US$450 per share, while the most bearish prices it at US$368. The narrow spread of estimates could suggest that the business' future is relatively easy to value, or thatthe analysts have a strong view on its prospects.

Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. It's clear from the latest estimates that Hubbell's rate of growth is expected to accelerate meaningfully, with the forecast 7.9% annualised revenue growth to the end of 2024 noticeably faster than its historical growth of 6.2% p.a. over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 7.9% annually. Hubbell is expected to grow at about the same rate as its industry, so it's not clear that we can draw any conclusions from its growth relative to competitors.

The Bottom Line

The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around Hubbell's earnings potential next year. They also reconfirmed their revenue estimates, with the company predicted to grow at about the same rate as the wider industry. The consensus price target held steady at US$414, with the latest estimates not enough to have an impact on their price targets.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have estimates - from multiple Hubbell analysts - going out to 2026, and you can see them free on our platform here.

It is also worth noting that we have found 2 warning signs for Hubbell 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.

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