Veralto Corporation Just Beat EPS By 5.7%: Here's What Analysts Think Will Happen Next

Investors in Veralto Corporation (NYSE:VLTO) had a good week, as its shares rose 6.6% to close at US$107 following the release of its second-quarter results. Veralto reported US$1.3b in revenue, roughly in line with analyst forecasts, although statutory earnings per share (EPS) of US$0.81 beat expectations, being 5.7% higher than what the analysts expected. 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 thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

See our latest analysis for Veralto

Taking into account the latest results, Veralto's 13 analysts currently expect revenues in 2024 to be US$5.18b, approximately in line with the last 12 months. Statutory per share are forecast to be US$3.25, approximately in line with the last 12 months. In the lead-up to this report, the analysts had been modelling revenues of US$5.15b and earnings per share (EPS) of US$3.25 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.

With the analysts reconfirming their revenue and earnings forecasts, it's surprising to see that the price target rose 8.4% to US$112. It looks as though they previously had some doubts over whether the business would live up to their expectations. 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. Currently, the most bullish analyst values Veralto at US$125 per share, while the most bearish prices it at US$100.00. Even so, with a relatively close grouping of estimates, it looks like the analysts are quite confident in their valuations, suggesting Veralto is an easy business to forecast or the the analysts are all using similar assumptions.

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 Veralto's rate of growth is expected to accelerate meaningfully, with the forecast 4.0% annualised revenue growth to the end of 2024 noticeably faster than its historical growth of 2.7% over the past year. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 6.5% per year. It seems obvious that, while the future growth outlook is brighter than the recent past, Veralto is expected to grow slower than the wider industry.

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. On the plus side, there were no major changes to revenue estimates; although forecasts imply they will perform worse than the wider industry. There was also a nice increase in the price target, with the analysts clearly feeling that the intrinsic value of the business is improving.

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. At Simply Wall St, we have a full range of analyst estimates for Veralto 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 1 warning sign for Veralto 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com