Analysts Just Slashed Their nVent Electric plc (NYSE:NVT) EPS Numbers

Market forces rained on the parade of nVent Electric plc (NYSE:NVT) shareholders today, when the analysts downgraded their forecasts for next year. Both revenue and earnings per share (EPS) estimates were cut sharply as analysts factored in the latest outlook for the business, concluding that they were too optimistic previously.

After the downgrade, the consensus from nVent Electric's nine analysts is for revenues of US$3.3b in 2025, which would reflect a measurable 6.7% decline in sales compared to the last year of performance. Statutory earnings per share are supposed to crater 29% to US$2.49 in the same period. Before this latest update, the analysts had been forecasting revenues of US$4.0b and earnings per share (EPS) of US$3.17 in 2025. Indeed, we can see that the analysts are a lot more bearish about nVent Electric's prospects, administering a measurable cut to revenue estimates and slashing their EPS estimates to boot.

View our latest analysis for nVent Electric

Analysts made no major changes to their price target of US$79.62, suggesting the downgrades are not expected to have a long-term impact on nVent Electric's valuation.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the nVent Electric's past performance and to peers in the same industry. These estimates imply that sales are expected to slow, with a forecast annualised revenue decline of 5.4% by the end of 2025. This indicates a significant reduction from annual growth of 11% over the last five years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 8.4% annually for the foreseeable future. It's pretty clear that nVent Electric's revenues are expected to perform substantially worse than the wider industry.

The Bottom Line

The most important thing to take away is that analysts cut their earnings per share estimates, expecting a clear decline in business conditions. Regrettably, they also downgraded their revenue estimates, and the latest forecasts imply the business will grow sales slower than the wider market. We're also surprised to see that the price target went unchanged. Still, deteriorating business conditions (assuming accurate forecasts!) can be a leading indicator for the stock price, so we wouldn't blame investors for being more cautious on nVent Electric after the downgrade.

Unfortunately, the earnings downgrade - if accurate - may also place pressure on nVent Electric's mountain of debt, which could lead to some belt tightening for shareholders. To see more of our financial analysis, you can click through to our free platform to learn more about its balance sheet and specific concerns we've identified.

We also provide an overview of the nVent Electric Board and CEO remuneration and length of tenure at the company, and whether insiders have been buying the stock, 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.