It's shaping up to be a tough period for Jacobs Engineering Group Inc. (NYSE:J), which a week ago released some disappointing quarterly results that could have a notable impact on how the market views the stock. It wasn't a great result overall - while revenue fell marginally short of analyst estimates at US$3.4b, statutory earnings missed forecasts by 17%, coming in at just US$1.03 per share. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.
Taking into account the latest results, the consensus forecast from Jacobs Engineering Group's nine analysts is for revenues of US$15.1b in 2022, which would reflect a satisfactory 7.1% improvement in sales compared to the last 12 months. Statutory earnings per share are predicted to soar 181% to US$6.24. Before this earnings report, the analysts had been forecasting revenues of US$15.3b and earnings per share (EPS) of US$6.22 in 2022. The consensus analysts don't seem to have seen anything in these results that would have changed their view on the business, given there's been no major change to their estimates.
It will come as no surprise then, to learn that the consensus price target is largely unchanged at US$158. 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 Jacobs Engineering Group analyst has a price target of US$170 per share, while the most pessimistic values it at US$140. With such a narrow range of valuations, the analysts apparently share similar views on what they think the business is worth.
Of course, another way to look at these forecasts is to place them into context against the industry itself. We can infer from the latest estimates that forecasts expect a continuation of Jacobs Engineering Group'shistorical trends, as the 9.6% annualised revenue growth to the end of 2022 is roughly in line with the 9.7% annual revenue growth over the past five years. Juxtapose this against our data, which suggests that other companies (with analyst coverage) in the industry are forecast to see their revenues grow 8.3% per year. So although Jacobs Engineering Group is expected to maintain its revenue growth rate, it's only growing at about the rate of the wider industry.
The Bottom Line
The most important thing to take away is that there's been no major change in sentiment, with the analysts reconfirming that the business is performing in line with their previous earnings per share estimates. They also reconfirmed their revenue estimates, with the company predicted to grow at about the same rate as 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.
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. We have forecasts for Jacobs Engineering Group going out to 2024, and you can see them free on our platform here.
Plus, you should also learn about the 2 warning signs we've spotted with Jacobs Engineering Group .
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