Methode Electronics, Inc. Just Beat Earnings Expectations: Here's What Analysts Think Will Happen Next

Methode Electronics, Inc. (NYSE:MEI) just released its latest quarterly results and things are looking bullish. The company beat both earnings and revenue forecasts, with revenue of US$286m, some 3.1% above estimates, and statutory earnings per share (EPS) coming in at US$1.09, 23% ahead of expectations. Analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. So we gathered the latest post-earnings forecasts to see what analysts' statutory forecasts suggest is in store for next year.

View our latest analysis for Methode Electronics

Taking into account the latest results, the most recent consensus for Methode Electronics from three analysts is for revenues of US$1.17b in 2021, which is a meaningful 8.6% increase on its sales over the past 12 months. Statutory earnings per share are expected to swell 16% to US$3.59. Before this earnings report, analysts had been forecasting revenues of US$1.18b and earnings per share (EPS) of US$3.62 in 2021. So it's pretty clear that, although analysts have updated their estimates, there's been no major change in expectations for the business following the latest results.

There were no changes to revenue or earnings estimates or the price target of US$41.67, suggesting that the company has met expectations in its recent result. 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. Currently, the most bullish analyst values Methode Electronics at US$43.00 per share, while the most bearish prices it at US$40.00. Still, with such a tight range of estimates, it suggests analysts have a pretty good idea of what they think the company is worth.

It can be useful to take a broader overview by seeing how analyst forecasts compare, both to the Methode Electronics's past performance and to peers in the same market. Analysts are definitely expecting Methode Electronics's growth to accelerate, with the forecast 8.6% growth ranking favourably alongside historical growth of 5.1% per annum over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 5.1% per year. It seems obvious that, while the growth outlook is brighter than the recent past, analysts also expect Methode Electronics to grow faster than the wider market.

The Bottom Line

The most important thing to take away is that there's been no major change in sentiment, with analysts reconfirming that earnings per share are expected to continue performing in line with their prior expectations. Fortunately, analysts also reconfirmed their revenue estimates, suggesting sales are tracking in line with expectations - and our data does suggest that Methode Electronics's revenues are expected to grow faster than the wider market. The consensus price target held steady at US$41.67, with the latest estimates not enough to have an impact on analysts' estimated valuations.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. At Simply Wall St, we have a full range of analyst estimates for Methode Electronics going out to 2023, and you can see them free on our platform here..

You can also view our analysis of Methode Electronics's balance sheet, and whether we think Methode Electronics is carrying too much debt, for free on our platform here.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. 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. Simply Wall St has no position in the stocks mentioned.

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