Yahoo Finance Armstrong World Industries, Inc. Just Beat Analyst Forecasts, And Analysts Have Been Updating Their Predictions
A week ago, Armstrong World Industries, Inc. (NYSE:AWI) came out with a strong set of quarterly numbers that could potentially lead to a re-rate of the stock. Armstrong World Industries beat earnings, with revenues hitting US$326m, ahead of expectations, and statutory earnings per share outperforming analyst reckonings by a solid 15%. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.
Check out our latest analysis for Armstrong World Industries
After the latest results, the seven analysts covering Armstrong World Industries are now predicting revenues of US$1.41b in 2024. If met, this would reflect a satisfactory 7.7% improvement in revenue compared to the last 12 months. Per-share earnings are expected to accumulate 8.8% to US$5.88. Before this earnings report, the analysts had been forecasting revenues of US$1.35b and earnings per share (EPS) of US$5.78 in 2024. There doesn't appear to have been a major change in sentiment following the results, other than the small lift in revenue estimates.
It may not be a surprise to see thatthe analysts have reconfirmed their price target of US$124, implying that the uplift in revenue is not expected to greatly contribute to Armstrong World Industries's valuation in the near term. 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. The most optimistic Armstrong World Industries analyst has a price target of US$134 per share, while the most pessimistic values it at US$115. This is a very narrow spread of estimates, implying either that Armstrong World Industries is an easy company to value, or - more likely - the analysts are relying heavily on some key assumptions.
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. The analysts are definitely expecting Armstrong World Industries' growth to accelerate, with the forecast 10% annualised growth to the end of 2024 ranking favourably alongside historical growth of 6.7% per annum over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 5.5% annually. Factoring in the forecast acceleration in revenue, it's pretty clear that Armstrong World Industries is expected to grow much faster than its industry.
The Bottom Line
The most obvious conclusion is that there's been no major change in the business' prospects in recent times, with the analysts holding their earnings forecasts steady, in line with previous estimates. Happily, they also upgraded their revenue estimates, and are forecasting them to grow faster than the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.
With that in mind, we wouldn't be too quick to come to a conclusion on Armstrong World Industries. 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 Armstrong World Industries going out to 2026, and you can see them free on our platform here..
You should always think about risks though. Case in point, we've spotted 1 warning sign for Armstrong World Industries you should be aware of.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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.
