Earnings Beat: MasTec, Inc. Just Beat Analyst Forecasts, And Analysts Have Been Updating Their Models
Last week, you might have seen that MasTec, Inc. (NYSE:MTZ) released its quarterly result to the market. The early response was not positive, with shares down 2.8% to US$49.64 in the past week. The results were mixed; although revenues of US$1.7b fell 12% short of analyst estimates, statutory earnings per share (EPS) of US$1.59 beat expectations by 11%. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.
Check out our latest analysis for MasTec
Taking into account the latest results, the most recent consensus for MasTec from eight analysts is for revenues of US$7.44b in 2021 which, if met, would be a decent 16% increase on its sales over the past 12 months. Statutory per share are forecast to be US$4.19, approximately in line with the last 12 months. Before this earnings report, the analysts had been forecasting revenues of US$7.49b and earnings per share (EPS) of US$4.13 in 2021. So it's pretty clear that, although the analysts have updated their estimates, there's been no major change in expectations for the business following the latest results.
With the analysts reconfirming their revenue and earnings forecasts, it's surprising to see that the price target rose 8.8% to US$60.70. It looks as though they previously had some doubts over whether the business would live up to their expectations. 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 MasTec, with the most bullish analyst valuing it at US$78.00 and the most bearish at US$54.00 per share. As you can see, analysts are not all in agreement on the stock's future, but the range of estimates is still reasonably narrow, which could suggest that the outcome is not totally unpredictable.
Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. The analysts are definitely expecting MasTec's growth to accelerate, with the forecast 16% growth ranking favourably alongside historical growth of 10% per annum over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 5.2% next year. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect MasTec to grow faster than the wider industry.
The Bottom Line
The most important thing to take away is that there's been no major change in sentiment, with the analysts reconfirming that the business is performing in line with their previous earnings per share estimates. Fortunately, they also reconfirmed their revenue numbers, suggesting sales are tracking in line with expectations - and our data suggests that revenues are expected to grow faster 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 said, the long-term trajectory of the company's earnings is a lot more important than next year. At Simply Wall St, we have a full range of analyst estimates for MasTec going out to 2022, and you can see them free on our platform here..
Don't forget that there may still be risks. For instance, we've identified 1 warning sign for MasTec that you should be aware of.
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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