Regal Rexnord Corporation Just Beat EPS By 24%: Here's What Analysts Think Will Happen Next

Regal Rexnord Corporation (NYSE:RRX) just released its quarterly report and things are looking bullish. It was overall a positive result, with revenues beating expectations by 2.7% to hit US$1.5b. Regal Rexnord also reported a statutory profit of US$0.94, which was an impressive 24% above what the analysts had forecast. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.

View our latest analysis for Regal Rexnord

Taking into account the latest results, the seven analysts covering Regal Rexnord provided consensus estimates of US$6.16b revenue in 2024, which would reflect a small 3.1% decline over the past 12 months. Earnings are expected to improve, with Regal Rexnord forecast to report a statutory profit of US$3.97 per share. Before this earnings report, the analysts had been forecasting revenues of US$6.16b and earnings per share (EPS) of US$3.92 in 2024. 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.

There were no changes to revenue or earnings estimates or the price target of US$197, suggesting that the company has met expectations in its recent result. 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 Regal Rexnord analyst has a price target of US$213 per share, while the most pessimistic values it at US$180. 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.

Of course, another way to look at these forecasts is to place them into context against the industry itself. These estimates imply that revenue is expected to slow, with a forecast annualised decline of 6.0% by the end of 2024. This indicates a significant reduction from annual growth of 18% over the last five years. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 7.9% per year. It's pretty clear that Regal Rexnord's revenues are expected to perform substantially worse than the wider industry.

The Bottom Line

The most obvious conclusion is that there's been no major change in the business' prospects in recent times, with the analysts holding their earnings forecasts steady, in line with previous estimates. On the plus side, there were no major changes to revenue estimates; although forecasts imply they will perform worse than the wider industry. The consensus price target held steady at US$197, 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 Regal Rexnord analysts - going out to 2026, and you can see them free on our platform here.

Even so, be aware that Regal Rexnord is showing 1 warning sign in our investment analysis , you should know about...

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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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