US$118 - That's What Analysts Think PulteGroup, Inc. (NYSE:PHM) Is Worth After These Results

It's been a good week for PulteGroup, Inc. (NYSE:PHM) shareholders, because the company has just released its latest full-year results, and the shares gained 2.1% to US$105. It was a credible result overall, with revenues of US$16b and statutory earnings per share of US$11.72 both in line with analyst estimates, showing that PulteGroup is executing in line with expectations. 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 PulteGroup

Taking into account the latest results, the current consensus from PulteGroup's 13 analysts is for revenues of US$16.9b in 2024. This would reflect a credible 5.5% increase on its revenue over the past 12 months. Statutory per-share earnings are expected to be US$11.94, roughly flat on the last 12 months. Before this earnings report, the analysts had been forecasting revenues of US$16.6b and earnings per share (EPS) of US$11.41 in 2024. So there seems to have been a moderate uplift in sentiment following the latest results, given the upgrades to both revenue and earnings per share forecasts for next year.

It will come as no surprise to learn that the analysts have increased their price target for PulteGroup 5.4% to US$118on the back of these upgrades. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. The most optimistic PulteGroup analyst has a price target of US$138 per share, while the most pessimistic values it at US$85.00. These price targets show that analysts do have some differing views on the business, but the estimates do not vary enough to suggest to us that some are betting on wild success or utter failure.

Of course, another way to look at these forecasts is to place them into context against the industry itself. We would highlight that PulteGroup's revenue growth is expected to slow, with the forecast 5.5% annualised growth rate until the end of 2024 being well below the historical 13% p.a. growth over the last five years. Compare this to the 102 other companies in this industry with analyst coverage, which are forecast to grow their revenue at 4.5% per year. Factoring in the forecast slowdown in growth, it looks like PulteGroup is forecast to grow at about the same rate as the wider industry.

The Bottom Line

The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around PulteGroup's earnings potential next year. There was also an upgrade to revenue estimates, although as we saw earlier, forecast growth is only expected to be about the same as 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. We have estimates - from multiple PulteGroup analysts - going out to 2026, and you can see them free on our platform here.

However, before you get too enthused, we've discovered 1 warning sign for PulteGroup that you should be aware 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.