Shareholders in PerkinElmer, Inc. (NYSE:PKI) may be thrilled to learn that the analysts have just delivered a major upgrade to their near-term forecasts. The consensus statutory numbers for both revenue and earnings per share (EPS) increased, with their view clearly much more bullish on the company's business prospects. The stock price has risen 4.4% to US$130 over the past week, suggesting investors are becoming more optimistic. It will be interesting to see if this latest upgrade is enough to kickstart further buying interest in the stock.
Following the upgrade, the latest consensus from PerkinElmer's ten analysts is for revenues of US$4.3b in 2021, which would reflect a sizeable 34% improvement in sales compared to the last 12 months. Statutory earnings per share are presumed to jump 60% to US$5.95. Before this latest update, the analysts had been forecasting revenues of US$3.6b and earnings per share (EPS) of US$4.56 in 2021. There has definitely been an improvement in perception recently, with the analysts substantially increasing both their earnings and revenue estimates.
It will come as no surprise to learn that the analysts have increased their price target for PerkinElmer 5.8% to US$136 on the back of these upgrades. 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. There are some variant perceptions on PerkinElmer, with the most bullish analyst valuing it at US$165 and the most bearish at US$99.00 per share. 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 PerkinElmer's past performance and to peers in the same industry. It's clear from the latest estimates that PerkinElmer's rate of growth is expected to accelerate meaningfully, with the forecast 34% revenue growth noticeably faster than its historical growth of 9.2% p.a. over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 9.1% next year. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect PerkinElmer to grow faster than the wider industry.
The Bottom Line
The biggest takeaway for us from these new estimates is that analysts upgraded their earnings per share estimates, with improved earnings power expected for next year. They also upgraded their revenue estimates for next year, and sales are expected to grow faster than the wider market. Given that the consensus looks almost universally bullish, with a substantial increase to forecasts and a higher price target, PerkinElmer could be worth investigating further.
Analysts are definitely bullish on PerkinElmer, but no company is perfect. Indeed, you should know that there are several potential concerns to be aware of, including a weak balance sheet. You can learn more, and discover the 1 other concern we've identified, for free on our platform here.
Another thing to consider is whether management and directors have been buying or selling stock recently. We provide an overview of all open market stock trades for the last twelve months on our platform, here.
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This article by Simply Wall St is general in nature. 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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