PulteGroup, Inc. Just Beat Analyst Forecasts, And Analysts Have Been Updating Their Predictions
As you might know, PulteGroup, Inc. (NYSE:PHM) just kicked off its latest second-quarter results with some very strong numbers. It was overall a positive result, with revenues beating expectations by 2.6% to hit US$2.6b. PulteGroup also reported a statutory profit of US$1.29, which was an impressive 46% 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 PulteGroup
earnings-and-revenue-growth
Following last week’s earnings report, PulteGroup’s twelve analysts are forecasting 2020 revenues to be US$10.6b, approximately in line with the last 12 months. Statutory earnings per share are predicted to accumulate 2.6% to US$4.36. Before this earnings report, the analysts had been forecasting revenues of US$9.73b and earnings per share (EPS) of US$3.26 in 2020. There’s been a pretty noticeable increase in sentiment, with the analysts upgrading revenues and making a great increase in earnings per share in particular.
It will come as no surprise to learn that the analysts have increased their price target for PulteGroup 25% to US$47.14on the back of these upgrades. 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 PulteGroup analyst has a price target of US$64.00 per share, while the most pessimistic values it at US$32.00. 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. These estimates imply that sales are expected to slow, with a forecast revenue decline of 0.5%, a significant reduction from annual growth of 13% over the last five years. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 5.6% next year. It’s pretty clear that PulteGroup’s revenues are expected to perform substantially worse than the wider 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. Fortunately, they also upgraded their revenue estimates, although our data indicates sales are expected to perform worse than the wider industry. We note an upgrade to the price target, suggesting that the analysts believes the intrinsic value of the business is likely to improve over time.
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..
Plus, you should also learn about the 3 warning signs we’ve spotted with PulteGroup .
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.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email [email protected].
