Yahoo Finance Briggs & Stratton Corporation Just Reported, And Analysts Assigned A US$6.33 Price Target
There's been a major selloff in Briggs & Stratton Corporation (NYSE:BGG) shares in the week since it released its second-quarter report, with the stock down 30% to US$3.67. Results look to have been somewhat negative - revenue fell 4.6% short of analyst estimates at US$438m, although statutory losses were somewhat better. The per-share loss was US$0.37, 71% smaller than analysts were expecting prior to the result. This is an important time for investors, as they can track a company's performance in its report, look at what top analysts are forecasting for next year, and see if there has been any change to expectations for the business. With this in mind, we've gathered the latest statutory forecasts to see what analysts are expecting for next year.
See our latest analysis for Briggs & Stratton
Following last week's earnings report, Briggs & Stratton's four analysts are forecasting 2020 revenues to be US$1.84b, approximately in line with the last 12 months. Per-share statutory losses are expected to explode, reaching US$0.39 per share. Before this earnings announcement, analysts had been forecasting revenues of US$1.90b and losses of US$0.15 per share in 2020. From this we can that analyst sentiment has definitely become more bearish after the latest results, leading to lower revenue forecasts and a pretty serious reduction to earnings per share estimates.
The average analyst price target fell 14% to US$6.33, implicitly signalling that lower earnings per share are a leading indicator for Briggs & Stratton's valuation. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. There are some variant perceptions on Briggs & Stratton, with the most bullish analyst valuing it at US$10.00 and the most bearish at US$4.00 per share. 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.
Further, we can compare these estimates to past performance, and see how Briggs & Stratton forecasts compare to the wider market's forecast performance. It's also worth noting that the years of declining sales look to have come to an end, with the forecast for flat revenues next year. Historically, Briggs & Stratton's sales have shrunk approximately 0.1% annually over the past five years. Compare this against analyst estimates for companies in the wider market, which suggest that revenues (in aggregate) are expected to grow 1.6% next year. So it's pretty clear that, in addition to having improving revenues, Briggs & Stratton is expected to grow at approximately than the market.
The Bottom Line
The highlight for us was that the consensus reduced its estimated losses next year, perhaps suggesting Briggs & Stratton is moving incrementally towards profitability. Lamentably, they also downgraded their sales forecasts, but the business is still expected to grow at roughly the same rate as the market itself. Analysts also downgraded their price target, suggesting that the latest news has led analysts to become more pessimistic about the intrinsic value of the business.
Still, the long-term prospects of the business are much more relevant than next year's earnings. At Simply Wall St, we have a full range of analyst estimates for Briggs & Stratton going out to 2023, and you can see them free on our platform here..
It might also be worth considering whether Briggs & Stratton's debt load is appropriate, using our debt analysis tools on the Simply Wall St platform, here.
If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. 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. Simply Wall St has no position in the stocks mentioned.
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