Yahoo Finance Plexus Corp. (NASDAQ:PLXS) Analysts Are Pretty Bullish On The Stock After Recent Results
Last week, you might have seen that Plexus Corp. (NASDAQ:PLXS) released its annual result to the market. The early response was not positive, with shares down 6.5% to US$68.30 in the past week. The result was positive overall - although revenues of US$3.4b were in line with what the analysts predicted, Plexus surprised by delivering a statutory profit of US$3.93 per share, modestly greater than expected. 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 collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.
View our latest analysis for Plexus
Taking into account the latest results, the current consensus from Plexus' six analysts is for revenues of US$3.51b in 2021, which would reflect a satisfactory 3.6% increase on its sales over the past 12 months. Per-share earnings are expected to step up 10% to US$4.43. In the lead-up to this report, the analysts had been modelling revenues of US$3.51b and earnings per share (EPS) of US$4.33 in 2021. The analysts seems to have become more bullish on the business, judging by their new earnings per share estimates.
The analysts have been lifting their price targets on the back of the earnings upgrade, with the consensus price target rising 17% to US$84.00. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. There are some variant perceptions on Plexus, with the most bullish analyst valuing it at US$91.00 and the most bearish at US$78.00 per share. The narrow spread of estimates could suggest that the business' future is relatively easy to value, or thatthe analysts have a strong view on its prospects.
Of course, another way to look at these forecasts is to place them into context against the industry itself. We would highlight that Plexus' revenue growth is expected to slow, with forecast 3.6% increase next year well below the historical 6.3%p.a. growth over the last five years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 7.7% next year. So it's pretty clear that, while revenue growth is expected to slow down, the wider industry is also expected to grow faster than Plexus.
The Bottom Line
The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around Plexus' earnings potential next year. On the plus side, there were no major changes to revenue estimates; although forecasts imply revenues will 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 Plexus. Long-term earnings power is much more important than next year's profits. We have forecasts for Plexus going out to 2022, and you can see them free on our platform here.
Plus, you should also learn about the 1 warning sign we've spotted with Plexus .
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.
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