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Analysts crafted financial statement about Carpenter’s second-quarter report.

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TLDR:

Carpenter Technology Corporation’s (NYSE:CRS) shares fell 4.5% after the release of its second-quarter report, which showed revenues 4.8% below expectations. However, earnings per share were in line with analyst estimates. Analysts have updated their earnings model and forecast a modest 2.7% improvement in revenue for 2024, along with a 38% surge in earnings per share. The consensus price target is largely unchanged at US$86.00, with the most optimistic analyst setting a target of US$100.00 and the most pessimistic setting it at US$75.00. The forecasted growth for Carpenter Technology is quicker than its historical growth and faster than other companies in the same industry.

Key Points:

  • Carpenter Technology’s shares fell 4.5% after its second-quarter report showed revenues 4.8% below expectations.
  • Earnings per share were in line with analyst estimates.
  • Analysts forecast a 2.7% improvement in revenue for 2024 and a 38% surge in earnings per share.
  • The consensus price target is unchanged at US$86.00, with the most optimistic analyst setting a target of US$100.00 and the most pessimistic setting it at US$75.00.
  • Forecasted growth for Carpenter Technology is quicker than its historical growth and faster than other companies in the same industry.

Full Article:

Carpenter Technology Corporation (NYSE:CRS) shareholders saw their shares drop 4.5% to US$63.41 in the week following the release of the company’s second-quarter report. Revenues for the quarter came in 4.8% below expectations, at US$624 million. However, earnings per share performed better, with a per-share profit of US$0.85, roughly in line with analyst estimates.

Following the release of the report, analysts have updated their earnings model and provided forecasts for the company’s future performance. For 2024, the consensus forecast from Carpenter Technology’s four analysts is for revenues of US$2.80 billion, reflecting a modest 2.7% improvement compared to the last 12 months. Statutory earnings per share are predicted to surge 38% to US$4.00.

Despite the update in forecasts, there has been no major change in expectations for the business. The consensus price target remains largely unchanged at US$86.00. However, it is important to note that the consensus price target is the average of analyst price targets and may not fully capture diverging opinions on the company’s valuation. The most optimistic analyst has set a price target of US$100.00 per share, while the most pessimistic values it at US$75.00.

While there may be diverging opinions on Carpenter Technology’s valuation, analysts seem confident in their forecasts, suggesting that the company is easy to forecast or that the analysts are using similar assumptions. Looking at the forecasted growth in the context of the industry, it is clear that Carpenter Technology is expected to grow much faster than its peers. The forecasted 5.5% annualized revenue growth to the end of 2024 is noticeably faster than its historical growth of 0.5% per year over the past five years. In comparison, other companies in the same industry are forecasted to grow their revenue by 4.1% annually.

In conclusion, the recent second-quarter report from Carpenter Technology did not bring major changes to the business’ prospects. Analysts have maintained their earnings forecasts and reconfirmed their revenue numbers. Forecasted growth for the company is expected to outpace its historical growth and the growth of other companies in the industry. The consensus price target remains largely unchanged, indicating that the intrinsic value of the business has not undergone any major changes. It is important to consider the long-term prospects of the business rather than focusing solely on next year’s earnings.

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