Earnings Miss: Masco Corporation Missed EPS By 30% And Analysts Are Revising Their Forecasts

The quarterly results for Masco Corporation (NYSE:MAS) were released last week, making it a good time to revisit its performance. Statutory earnings per share fell badly short of expectations, coming in at US$0.77, some 30% below analyst forecasts, although revenues were okay, approximately in line with analyst estimates at US$2.0b. 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. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.

View our latest analysis for Masco

Taking into account the latest results, Masco's 21 analysts currently expect revenues in 2025 to be US$8.02b, approximately in line with the last 12 months. Per-share earnings are expected to swell 15% to US$4.44. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$8.15b and earnings per share (EPS) of US$4.47 in 2025. The consensus analysts don't seem to have seen anything in these results that would have changed their view on the business, given there's been no major change to their estimates.

The analysts reconfirmed their price target of US$87.03, showing that the business is executing well and in line with expectations. 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 Masco analyst has a price target of US$96.00 per share, while the most pessimistic values it at US$75.00. Even so, with a relatively close grouping of estimates, it looks like the analysts are quite confident in their valuations, suggesting Masco 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. It's pretty clear that there is an expectation that Masco's revenue growth will slow down substantially, with revenues to the end of 2025 expected to display 1.4% growth on an annualised basis. This is compared to a historical growth rate of 4.4% over the past five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 4.5% per year. So it's pretty clear that, while revenue growth is expected to slow down, the wider industry is also expected to grow faster than Masco.

The Bottom Line

The most important thing to take away is that there's been no major change in sentiment, with the analysts reconfirming that the business is performing in line with their previous earnings per share estimates. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting that it's tracking in line with expectations. Although our data does suggest that Masco's revenue is expected to perform worse than the wider industry. The consensus price target held steady at US$87.03, with the latest estimates not enough to have an impact on their price targets.

With that in mind, we wouldn't be too quick to come to a conclusion on Masco. Long-term earnings power is much more important than next year's profits. We have forecasts for Masco going out to 2026, and you can see them free on our platform here.

We don't want to rain on the parade too much, but we did also find 2 warning signs for Masco 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.