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Atkore Inc. (NYSE:ATKR) shareholders will have a reason to smile today, with the analysts making substantial upgrades to this year's forecasts. Consensus estimates suggest investors could expect greatly increased statutory revenues and earnings per share, with analysts modelling a real improvement in business performance.
After this upgrade, Atkore's three analysts are now forecasting revenues of US$2.6b in 2021. This would be a huge 41% improvement in sales compared to the last 12 months. Per-share earnings are expected to jump 131% to US$9.69. Previously, the analysts had been modelling revenues of US$2.1b and earnings per share (EPS) of US$5.29 in 2021. There has definitely been an improvement in perception recently, with the analysts substantially increasing both their earnings and revenue estimates.
See our latest analysis for Atkore
With these upgrades, we're not surprised to see that the analysts have lifted their price target 5.9% to US$85.50 per share. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. Currently, the most bullish analyst values Atkore at US$90.00 per share, while the most bearish prices it at US$72.00. With such a narrow range of valuations, analysts apparently share similar views on what they think the business is worth.
Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. The analysts are definitely expecting Atkore's growth to accelerate, with the forecast 99% annualised growth to the end of 2021 ranking favourably alongside historical growth of 4.8% per annum 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 11% per year. Factoring in the forecast acceleration in revenue, it's pretty clear that Atkore is expected to grow much faster than its industry.
The Bottom Line
The most important thing to take away from this upgrade is that analysts upgraded their earnings per share estimates for this year, expecting improving business conditions. They also upgraded their revenue estimates for this year, and sales are expected to grow faster than the wider market. Given that the consensus looks almost universally bullish, with a substantial increase to forecasts and a higher price target, Atkore could be worth investigating further.
Even so, the longer term trajectory of the business is much more important for the value creation of shareholders. We have estimates - from multiple Atkore analysts - going out to 2023, and you can see them free on our platform here.