Need To Know: Analysts Are Much More Bullish On Plantronics, Inc. (NYSE:PLT)

Plantronics, Inc. (NYSE:PLT) shareholders will have a reason to smile today, with the analysts making substantial upgrades to next year's statutory 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. Plantronics has also found favour with investors, with the stock up a magnificent 32% to US$41.85 over the past week. It will be interesting to see if today's upgrade is enough to propel the stock even higher.

After this upgrade, Plantronics' six analysts are now forecasting revenues of US$1.8b in 2022. This would be a solid 9.7% improvement in sales compared to the last 12 months. Losses are expected to turn into profits real soon, with the analysts forecasting US$0.73 in per-share earnings. Yet prior to the latest estimates, the analysts had been forecasting revenues of US$1.6b and losses of US$0.64 per share in 2022. It looks like there's been a definite improvement in business conditions, with a revenue upgrade supposed to lead to profitability sooner than previously forecast.

See our latest analysis for Plantronics

With these upgrades, we're not surprised to see that the analysts have lifted their price target 52% to US$45.00 per share. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. There are some variant perceptions on Plantronics, with the most bullish analyst valuing it at US$55.00 and the most bearish at US$26.00 per share. Note the wide gap in analyst price targets? This implies to us that there is a fairly broad range of possible scenarios for the underlying business.

Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. We would highlight that Plantronics' revenue growth is expected to slow, with forecast 9.7% increase next year well below the historical 19% p.a. growth over the last five years. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 4.3% next year. Even after the forecast slowdown in growth, it seems obvious that Plantronics is also expected to grow faster than the wider industry.

The Bottom Line

The most important thing to take away from this upgrade is that there is now an expectation for Plantronics to become profitable next year, compared to previous expectations of a loss. 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, Plantronics could be worth investigating further.

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 Plantronics going out to 2023, and you can see them free on our platform here..

Of course, seeing company management invest large sums of money in a stock can be just as useful as knowing whether analysts are upgrading their estimates. So you may also wish to search this free list of stocks that insiders are buying.

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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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