Earnings Miss: RBC Bearings Incorporated Missed EPS By 17% And Analysts Are Revising Their Forecasts

Last week, you might have seen that RBC Bearings Incorporated (NYSE:RBC) released its quarterly result to the market. The early response was not positive, with shares down 3.5% to US$266 in the past week. Revenues were in line with forecasts, at US$374m, although statutory earnings per share came in 17% below what the analysts expected, at US$1.39 per share. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.

See our latest analysis for RBC Bearings

Following the latest results, RBC Bearings' seven analysts are now forecasting revenues of US$1.67b in 2025. This would be a meaningful 8.5% improvement in revenue compared to the last 12 months. Per-share earnings are expected to surge 36% to US$8.20. In the lead-up to this report, the analysts had been modelling revenues of US$1.68b and earnings per share (EPS) of US$8.37 in 2025. The analysts seem to have become a little more negative on the business after the latest results, given the small dip in their earnings per share numbers for next year.

It might be a surprise to learn that the consensus price target was broadly unchanged at US$280, with the analysts clearly implying that the forecast decline in earnings is not expected to have much of an impact on valuation. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. The most optimistic RBC Bearings analyst has a price target of US$310 per share, while the most pessimistic values it at US$250. With such a narrow range of valuations, the analysts apparently share similar views on what they think the business is worth.

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 pretty clear that there is an expectation that RBC Bearings' revenue growth will slow down substantially, with revenues to the end of 2025 expected to display 6.7% growth on an annualised basis. This is compared to a historical growth rate of 21% 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 3.3% annually. Even after the forecast slowdown in growth, it seems obvious that RBC Bearings is also expected to grow faster than 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 RBC Bearings. Happily, there were no major changes to revenue forecasts, with the business still expected to grow faster 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. We have forecasts for RBC Bearings going out to 2026, and you can see them free on our platform here.

Before you take the next step you should know about the 1 warning sign for RBC Bearings that we have uncovered.

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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.