As you might know, Federal Signal Corporation (NYSE:FSS) recently reported its quarterly numbers. Revenues were US$425m, approximately in line with whatthe analysts expected, although statutory earnings per share (EPS) crushed expectations, coming in at US$0.84, an impressive 30% ahead of estimates. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.
Taking into account the latest results, the consensus forecast from Federal Signal's six analysts is for revenues of US$1.87b in 2024. This reflects a modest 6.2% improvement in revenue compared to the last 12 months. Per-share earnings are expected to increase 8.6% to US$3.23. Before this earnings report, the analysts had been forecasting revenues of US$1.88b and earnings per share (EPS) of US$3.07 in 2024. The analysts seems to have become more bullish on the business, judging by their new earnings per share estimates.
The consensus price target was unchanged at US$84.50, implying that the improved earnings outlook is not expected to have a long term impact on value creation for shareholders. 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. Currently, the most bullish analyst values Federal Signal at US$95.00 per share, while the most bearish prices it at US$76.00. This is a very narrow spread of estimates, implying either that Federal Signal is an easy company to value, or - more likely - the analysts are relying heavily on some key assumptions.
Of course, another way to look at these forecasts is to place them into context against the industry itself. The period to the end of 2024 brings more of the same, according to the analysts, with revenue forecast to display 8.4% growth on an annualised basis. That is in line with its 8.8% 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 Federal Signal is expected to maintain its revenue growth rate, it's definitely expected to grow faster than the wider industry.
The Bottom Line
The most important thing here is that the analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards Federal Signal following these results. Happily, there were no major changes to revenue forecasts, with the business still expected to grow faster than the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.
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 Federal Signal going out to 2026, and you can see them free on our platform here..
You can also view our analysis of Federal Signal's balance sheet, and whether we think Federal Signal is carrying too much debt, for free on our platform here.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
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.