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Celebrations may be in order for Worthington Industries, Inc. (NYSE:WOR) shareholders, with the analysts delivering a significant upgrade to their statutory estimates for the company. The analysts have sharply increased their revenue numbers, with a view that Worthington Industries will make substantially more sales than they'd previously expected. The market seems to be pricing in some improvement in the business too, with the stock up 9.1% over the past week, closing at US$57.63. Could this big upgrade push the stock even higher?
Following the upgrade, the consensus from three analysts covering Worthington Industries is for revenues of US$4.2b in 2023, implying an uneasy 11% decline in sales compared to the last 12 months. Prior to the latest estimates, the analysts were forecasting revenues of US$3.7b in 2023. It looks like there's been a clear increase in optimism around Worthington Industries, given the decent improvement in revenue forecasts.
Check out our latest analysis for Worthington Industries
Notably, the analysts have cut their price target 13% to US$55.00, suggesting concerns around Worthington Industries' valuation.
These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Worthington Industries' past performance and to peers in the same industry. These estimates imply that sales are expected to slow, with a forecast annualised revenue decline of 9.3% by the end of 2023. This indicates a significant reduction from annual growth of 2.5% 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 2.0% per year. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Worthington Industries is expected to lag the wider industry.
The Bottom Line
The highlight for us was that analysts increased their revenue forecasts for Worthington Industries next year. They're also anticipating slower revenue growth than the wider market. The consensus price target fell measurably, with analysts seemingly not reassured by recent business developments, leading to a lower estimate of Worthington Industries' future valuation. Given that analysts appear to be expecting substantial improvement in the sales pipeline, now could be the right time to take another look at Worthington Industries.
Analysts are definitely bullish on Worthington Industries, but no company is perfect. Indeed, you should know that there are several potential concerns to be aware of, including concerns around earnings quality. For more information, you can click through to our platform to learn more about this and the 2 other concerns we've identified .