PerkinElmer, Inc. (NYSE:PKI) just released its latest quarterly results and things are looking bullish. It was a solid earnings report, with revenues and statutory earnings per share (EPS) both coming in strong. Revenues were 15% higher than the analysts had forecast, at US$964m, while EPS were US$1.57 beating analyst models by 26%. 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. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.
Taking into account the latest results, the most recent consensus for PerkinElmer from ten analysts is for revenues of US$4.08b in 2021 which, if met, would be a sizeable 26% increase on its sales over the past 12 months. Per-share earnings are expected to leap 60% to US$5.95. In the lead-up to this report, the analysts had been modelling revenues of US$3.57b and earnings per share (EPS) of US$4.56 in 2021. So we can see there's been a pretty clear increase in sentiment following the latest results, with both revenues and earnings per share receiving a decent lift in the latest estimates.
It will come as no surprise to learn that the analysts have increased their price target for PerkinElmer 5.8% to US$136on 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. The most optimistic PerkinElmer analyst has a price target of US$165 per share, while the most pessimistic values it at US$99.00. As you can see, analysts are not all in agreement on the stock's future, but the range of estimates is still reasonably narrow, which could suggest that the outcome is not totally unpredictable.
Of course, another way to look at these forecasts is to place them into context against the industry itself. It's clear from the latest estimates that PerkinElmer's rate of growth is expected to accelerate meaningfully, with the forecast 26% 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 9.4% next year. Factoring in the forecast acceleration in revenue, it's pretty clear that PerkinElmer is expected to grow much faster than its industry.
The Bottom Line
The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around PerkinElmer's earnings potential next year. Happily, they also upgraded their revenue estimates, and are forecasting revenues to grow faster than the wider industry. We note an upgrade to the price target, suggesting that the analysts believes the intrinsic value of the business is likely to improve over time.
Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have forecasts for PerkinElmer going out to 2024, and you can see them free on our platform here.
Don't forget that there may still be risks. For instance, we've identified 2 warning signs for PerkinElmer (1 is a bit unpleasant) you should be aware of.
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