The latest analyst coverage could presage a bad day for Modine Manufacturing Company (NYSE:MOD), with the analysts making across-the-board cuts to their statutory estimates that might leave shareholders a little shell-shocked. Revenue and earnings per share (EPS) forecasts were both revised downwards, with analysts seeing grey clouds on the horizon. Shares are up 8.2% to US$107 in the past week. We’d be curious to see if the downgrade is enough to reverse investor sentiment on the business.
Following the latest downgrade, the current consensus, from the ten analysts covering Modine Manufacturing, is for revenues of US$3.1b in 2027, which would reflect an uncomfortable 13% reduction in Modine Manufacturing’s sales over the past 12 months. Per-share earnings are expected to jump 82% to US$4.44. Prior to this update, the analysts had been forecasting revenues of US$3.5b and earnings per share (EPS) of US$5.75 in 2027. It looks like analyst sentiment has declined substantially, with a substantial drop in revenue estimates and a large cut to earnings per share numbers as well.
Check out our latest analysis for Modine Manufacturing
It’ll come as no surprise then, to learn that the analysts have cut their price target 27% to US$211.
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 would highlight that sales are expected to reverse, with a forecast 25% annualised revenue decline to the end of 2027. That is a notable change from historical growth of 10% over the last five years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 6.5% annually for the foreseeable future. So although its revenues are forecast to shrink, this cloud does not come with a silver lining – Modine Manufacturing is expected to lag the wider industry.
The Bottom Line
The biggest issue in the new estimates is that analysts have reduced their earnings per share estimates, suggesting business headwinds lay ahead for Modine Manufacturing. Regrettably, they also downgraded their revenue estimates, and the latest forecasts imply the business will grow sales slower than the wider market. Given the scope of the downgrades, it would not be a surprise to see the market become more wary of the business.
Worse, Modine Manufacturing is labouring under a substantial debt burden, which – if today’s forecasts prove accurate – the forecast downgrade could potentially exacerbate. See why we’re concerned about Modine Manufacturing’s balance sheet by visiting our risks dashboard for free on our platform here.
We also provide an overview of the Modine Manufacturing Board and CEO remuneration and length of tenure at the company, and whether insiders have been buying the stock, here.
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