ITT (NYSE:ITT) Q3 2020 Earnings Prep

in EARNINGS/INVESTING IDEAS by

ITT Inc. (NYSE:ITT) is scheduled to report Q3 earnings results on October 30, 2020.

The company is expected to report earnings of $0.71/share on revenue of $580.8 million. The consensus earnings per share (EPS) of $0.71/share is based on a poll of 12 analysts and represents a decline in eps of −27.2% over the same quarter last year, when the company reported earnings of $0.97/share.

The revenue forecast of $580.8 million based on a poll of 12 analysts implies a year-over-year (YoY) decline in revenue of −18.4%. Last year the company reported $711.9 million in revenue for the quarter.

Expected to report EPS contraction of −27.2% for Q3, 2020
Metric Expected Prior Year YoY Change
Revenue $580.76 $711.90 −18.4%
EPS $0.71 $0.97 −27.2%

Earnings Call Trends

Management has been great at managing analyst expectations historically. The company has a perfect record over the last 8 tracked quarters of exceeding earnings guidance.

What are your expectations from ITT Inc. for earnings this quarter? Let us know in the comments!

Analyst Expected vs. Reported EPS
Quarter Expected Reported Surprise Result
Q2, 2020 $0.37 $0.57 52.2% Beat
Q1, 2020 $0.75 $0.80 7.1% Beat
Q4, 2019 $0.92 $0.99 7.7% Beat
Q3, 2019 $0.90 $0.97 7.7% Beat
Q2, 2019 $0.89 $0.93 4.5% Beat
Q1, 2019 $0.84 $0.91 7.9% Beat
Q4, 2018 $0.74 $0.82 10.6% Beat
Q3, 2018 $0.79 $0.82 3.7% Beat

In the following table, we summarize the company’s stock price movements after earnings releases. The “Price Day Prior” column shows the closing stock price on the day before the earnings report, and the “Price Next Day” column shows the stock price at the end of the trading day after the earnings report. After the last earnings report for the period ending June 30, 2020, the stock price reacted by falling −2.2%.

Stock Price Performance After Earnings
Report Date Price Day Prior Price Next Day Change % Result
July 31, 2020 $59 $57.73 −2.2% Decline
May 1, 2020 $52.72 $50.36 −4.5% Decline
February 21, 2020 $68.87 $71.19 3.4% Increase
November 1, 2019 $59.45 $64.57 8.6% Increase

The other question to consider is one of earnings manipulation. There is a lot of pressure on management each quarter to deliver on earnings expectations. The Beneish M-Score is a statistical model that provides some insight into whether the company might be manipulating earnings. With a Beneish M-Score of −2.93, the model suggests that the company is not likely to be an earnings manipulator. A value of −2.93 implies a 0.2% chance of earnings manipulation.

Fundamentals And Technical Analysis

ITT Inc. is currently trading at $64.68/share, down −2.5% for the day. The company is trading at approximately 85.6% of its 52-week high of $75.56/share. The company’s stock price is up 12.0% since the last earnings report and down −1.2% over the previous week. The company’s 14 Day Relative Price Index (RSI) of 54.74 suggests the company is trading in technically neutral territory. The RSI is considered overbought when above 70 and oversold when below 30.


NYSE:ITT Stock Price Chart
Source: Finbox

The current share price implies a price-to-earnings (P/E) multiple of 17.72 and a forward P/E multiple of 23.40.

ITT Inc.’s current share price also implies a price-to-book (P/B) multiple of 2.72. The following table summarizes some other key fundamental ratios:

Data as of October 27, 2020
Metric Value
Last Reported Fiscal Period Key FY2020.Q2
Period End Date June 30, 2020
Stock Price (Current) $64.68
P/E Ratio 17.7x
P/E Ratio (Fwd) 23.4x
PEG Ratio 2.5
Total Debt / Total Capital 5.7%
Levered Free Cash Flow $379.6 million
EV / EBITDA 11.1x

Finbox

ITT Inc. is a mid-cap stock with a market capitalization of $5.588 billion and a total enterprise value of $5.122 billion. The company operates in the Industrials sector and the Machinery industry.

ITT Inc. manufactures and sells engineered critical components and customized technology solutions for the energy, transportation, and industrial markets worldwide. The company operates through three segments: Motion Technologies, Industrial Process, and Connect & Control Technologies. The Motion Technologies segment manufactures brake pads, shims, shock absorbers, and energy absorption components; and sealing technologies primarily for the transportation industry, including passenger cars, light- and heavy-duty commercial and military vehicles, buses, and rail. The Industrial Process segment designs and manufactures industrial pumps, valves, and plant optimization systems; and centrifugal process pumps, twin screw, axials, and positive displacement pumps, and water systems, as well as aftermarket solutions, such as repairs and upgrades services. It serves various customers in industries, such as chemical, oil and gas, mining, and other industrial process markets. The Connect & Control Technologies segment designs and manufactures a range of engineered connectors and specialized control components for critical applications supporting various markets, including aerospace and defense, industrial, transportation, medical, and oil and gas. The connector product portfolio includes electrical connectors, such as circular, rectangular, radio frequency, fiber optic, D-sub miniature, micro-miniature, and cable assemblies; and control products consist of fuel and water pumps, valves, electro-mechanical rotary and linear actuators, and pressure, temperature, limit, and flow switches for various aircraft systems. ITT Inc. was founded in 1920 and is headquartered in White Plains, New York.

Expertise: financial technology, analyzing market trends. Brian is a founder at finbox.io, where he’s focused on building tools that make it faster and easier for investors to research stock fundamentals. Brian’s background is in physics & computer science and previously worked as a software engineer at GE Healthcare. He enjoys applying his expertise in technology to help find market trends that impact investors. Brian can be reached at brian@finbox.io or at +1 (516) 778-6257.

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