Carpenter Technology Corporation Just Beat Analyst Forecasts, And Analysts Have Been Updating Their Predictions

Shareholders of Carpenter Technology Corporation (NYSE:CRS) will be pleased this week, given that the stock price is up 17% to US$199 following its latest third-quarter results. Carpenter Technology reported US$727m in revenue, roughly in line with analyst forecasts, although statutory earnings per share (EPS) of US$1.88 beat expectations, being 7.5% higher than what the analysts expected. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

We check all companies for important risks. See what we found for Carpenter Technology in our free report.

Following the latest results, Carpenter Technology's seven analysts are now forecasting revenues of US$3.17b in 2026. This would be a notable 8.6% improvement in revenue compared to the last 12 months. Per-share earnings are expected to bounce 28% to US$9.18. Before this earnings report, the analysts had been forecasting revenues of US$3.19b and earnings per share (EPS) of US$9.06 in 2026. 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.

See our latest analysis for Carpenter Technology

The consensus price target rose 5.5% to US$247despite there being no meaningful change to earnings estimates. It could be that the analystsare reflecting the predictability of Carpenter Technology's earnings by assigning a price premium. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. The most optimistic Carpenter Technology analyst has a price target of US$300 per share, while the most pessimistic values it at US$200. 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.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Carpenter Technology's past performance and to peers in the same industry. We would highlight that Carpenter Technology's revenue growth is expected to slow, with the forecast 6.8% annualised growth rate until the end of 2026 being well below the historical 11% p.a. growth over the last five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 4.2% annually. So it's pretty clear that, while Carpenter Technology's revenue growth is expected to slow, it's still expected to grow faster than the industry itself.

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. Happily, there were no major changes to revenue forecasts, with the business still expected to grow faster 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.

With that in mind, we wouldn't be too quick to come to a conclusion on Carpenter Technology. Long-term earnings power is much more important than next year's profits. We have estimates - from multiple Carpenter Technology analysts - going out to 2027, and you can see them free on our platform here.

It might also be worth considering whether Carpenter Technology's debt load is appropriate, using our debt analysis tools on the Simply Wall St platform, here.

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

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.