As you might know, PulteGroup, Inc. (NYSE:PHM) just kicked off its latest quarterly results with some very strong numbers. The company beat both earnings and revenue forecasts, with revenue of US$3.0b, some 6.3% above estimates, and statutory earnings per share (EPS) coming in at US$1.54, 35% ahead of expectations. The 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. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.
Following the latest results, PulteGroup's eleven analysts are now forecasting revenues of US$12.5b in 2021. This would be a notable 15% improvement in sales compared to the last 12 months. Statutory earnings per share are predicted to swell 11% to US$5.33. Before this earnings report, the analysts had been forecasting revenues of US$11.9b and earnings per share (EPS) of US$4.87 in 2021. It looks like there's been a modest increase in sentiment following the latest results, withthe analysts becoming a bit more optimistic in their predictions for both revenues and earnings.
Despite these upgrades,the analysts have not made any major changes to their price target of US$53.15, suggesting that the higher estimates are not likely to have a long term impact on what the stock is worth. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. There are some variant perceptions on PulteGroup, with the most bullish analyst valuing it at US$77.00 and the most bearish at US$32.00 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.
These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the PulteGroup's past performance and to peers in the same industry. The analysts are definitely expecting PulteGroup's growth to accelerate, with the forecast 15% growth ranking favourably alongside historical growth of 12% 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 9.5% per year. Factoring in the forecast acceleration in revenue, it's pretty clear that PulteGroup 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 PulteGroup's earnings potential next year. Happily, they also upgraded their revenue estimates, and are forecasting revenues to grow faster than the wider industry. The consensus price target held steady at US$53.15, with the latest estimates not enough to have an impact on their price targets.
With that in mind, we wouldn't be too quick to come to a conclusion on PulteGroup. Long-term earnings power is much more important than next year's profits. At Simply Wall St, we have a full range of analyst estimates for PulteGroup going out to 2022, and you can see them free on our platform here..
Even so, be aware that PulteGroup is showing 2 warning signs in our investment analysis , you should know about...
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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