Armstrong World Industries, Inc. Just Missed Earnings - But Analysts Have Updated Their Models
Shareholders might have noticed that Armstrong World Industries, Inc. (NYSE:AWI) filed its quarterly result this time last week. The early response was not positive, with shares down 3.2% to US$166 in the past week. Revenues of US$476m were in line with forecasts, although statutory earnings per share (EPS) came in below expectations at US$2.17, missing estimates by 7.1%. 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 Armstrong World Industries' eleven analysts is for revenues of US$1.93b in 2027. This reflects a notable 11% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to jump 20% to US$9.22. In the lead-up to this report, the analysts had been modelling revenues of US$1.92b and earnings per share (EPS) of US$9.50 in 2027. So it looks like there's been a small decline in overall sentiment after the recent results - there's been no major change to revenue estimates, but the analysts did make a minor downgrade to their earnings per share forecasts.
View our latest analysis for Armstrong World Industries
It might be a surprise to learn that the consensus price target was broadly unchanged at US$200, with the analysts clearly implying that the forecast decline in earnings is not expected to have much of an impact on valuation. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. Currently, the most bullish analyst values Armstrong World Industries at US$225 per share, while the most bearish prices it at US$173. With such a narrow range of valuations, the analysts apparently share similar views on what they think the business is worth.
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. The period to the end of 2027 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 9.5% annual growth over the past five years. Compare this with the broader industry, which analyst estimates (in aggregate) suggest will see revenues grow 6.8% annually. So although Armstrong World Industries is expected to maintain its revenue growth rate, it's only growing at about the rate of the wider industry.
The Bottom Line
The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Armstrong World Industries. They also reconfirmed their revenue estimates, with the company predicted to grow at about the same rate as the wider industry. The consensus price target held steady at US$200, 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 Armstrong World Industries. Long-term earnings power is much more important than next year's profits. We have estimates - from multiple Armstrong World Industries analysts - going out to 2028, and you can see them free on our platform here.
Even so, be aware that Armstrong World Industries is showing 1 warning sign in our investment analysis , you should know about...
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