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Results: Dover Corporation Beat Earnings Expectations And Analysts Now Have New Forecasts

Dover Corporation (NYSE:DOV) defied analyst predictions to release its third-quarter results, which were ahead of market expectations. It was overall a positive result, with revenues beating expectations by 6.6% to hit US$1.7b. Dover also reported a statutory profit of US$1.38, which was an impressive 21% above what the analysts had forecast. 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. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.

View our latest analysis for Dover

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Taking into account the latest results, the current consensus from Dover's 14 analysts is for revenues of US$6.98b in 2021, which would reflect a credible 4.5% increase on its sales over the past 12 months. Statutory earnings per share are predicted to swell 18% to US$5.49. Before this earnings report, the analysts had been forecasting revenues of US$6.90b and earnings per share (EPS) of US$5.23 in 2021. So the consensus seems to have become somewhat more optimistic on Dover's earnings potential following these results.

There's been no major changes to the consensus price target of US$126, suggesting that the improved earnings per share outlook is not enough to have a long-term positive impact on the stock's valuation. 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. The most optimistic Dover analyst has a price target of US$136 per share, while the most pessimistic values it at US$108. The narrow spread of estimates could suggest that the business' future is relatively easy to value, or thatthe analysts have a strong view on its prospects.

One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. It's clear from the latest estimates that Dover's rate of growth is expected to accelerate meaningfully, with the forecast 4.5% revenue growth noticeably faster than its historical growth of 0.5%p.a. 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 7.3% per year. So it's clear that despite the acceleration in growth, Dover is expected to grow meaningfully slower than the industry average.

The Bottom Line

The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around Dover's earnings potential next year. On the plus side, there were no major changes to revenue estimates; although forecasts imply revenues will perform worse than the wider industry. The consensus price target held steady at US$126, with the latest estimates not enough to have an impact on their price targets.

Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. At Simply Wall St, we have a full range of analyst estimates for Dover 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 Dover that you should be aware of.

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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