Watts Water Technologies, Inc. (NYSE:WTS) just released its first-quarter report and things are looking bullish. The company beat expectations with revenues of US$571m arriving 4.8% ahead of forecasts. Statutory earnings per share (EPS) were US$2.17, 6.0% ahead of estimates. 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.
Following the latest results, Watts Water Technologies' eight analysts are now forecasting revenues of US$2.27b in 2024. This would be an okay 5.2% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to accumulate 4.8% to US$8.48. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$2.26b and earnings per share (EPS) of US$8.34 in 2024. 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$206. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. The most optimistic Watts Water Technologies analyst has a price target of US$225 per share, while the most pessimistic values it at US$175. Even so, with a relatively close grouping of estimates, it looks like the analysts are quite confident in their valuations, suggesting Watts Water Technologies is an easy business to forecast or the the analysts are all using similar assumptions.
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. We can infer from the latest estimates that forecasts expect a continuation of Watts Water Technologies'historical trends, as the 7.0% annualised revenue growth to the end of 2024 is roughly in line with the 7.3% annual growth over the past five years. Compare this with the broader industry, which analyst estimates (in aggregate) suggest will see revenues grow 3.6% annually. So although Watts Water Technologies is expected to maintain its revenue growth rate, it's definitely expected to grow faster than the wider industry.
The Bottom Line
The most obvious conclusion is that there's been no major change in the business' prospects in recent times, with the analysts holding their earnings forecasts steady, in line with previous estimates. Happily, there were no major changes to revenue forecasts, with the business still expected to grow faster than the wider industry. The consensus price target held steady at US$206, with the latest estimates not enough to have an impact on their price targets.
With that in mind, we wouldn't be too quick to come to a conclusion on Watts Water Technologies. Long-term earnings power is much more important than next year's profits. At Simply Wall St, we have a full range of analyst estimates for Watts Water Technologies going out to 2026, and you can see them free on our platform here..
And what about risks? Every company has them, and we've spotted 1 warning sign for Watts Water Technologies you should know about.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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.