nVent Electric plc (NYSE:NVT) is scheduled to report Q3 earnings results before markets open for trading on October 30, 2020.
The company is expected to report earnings of $0.40/share on revenue of $494.6 million. The consensus earnings per share (EPS) of $0.40/share is based on a poll of 7 analysts and represents a decline in eps of −17.5% over the same quarter last year, when the company reported earnings of $0.49/share.
The revenue forecast of $494.6 million based on a poll of 6 analysts implies a year-over-year (YoY) decline in revenue of −11.7%. Last year the company reported $559.8 million in revenue for the quarter.
| Metric | Expected | Prior Year | YoY Change |
|---|---|---|---|
| Revenue | $494.58 | $559.80 | −11.7% |
| EPS | $0.40 | $0.49 | −17.5% |
Earnings Call Trends
Historically, management has exceeded analyst expectations 3 out of the last 8 tracked quarters, missed 2 quarters, and met expectations 2 quarters.
What are your expectations from nVent Electric plc for earnings this quarter? Let us know in the comments!
| Quarter | Expected | Reported | Surprise | Result |
|---|---|---|---|---|
| Q2, 2020 | $0.24 | $0.29 | 18.4% | Beat |
| Q1, 2020 | $0.37 | $0.34 | −8.1% | Missed |
| Q4, 2019 | $0.44 | $0.47 | 6.8% | Beat |
| Q3, 2019 | $0.47 | $0.49 | 4.3% | Beat |
| Q2, 2019 | $0.44 | $0.44 | 0% | Met |
| Q1, 2019 | $0.39 | $0.39 | 0% | Met |
| Q4, 2018 | $0.46 | $0.45 | −1.3% | Missed |
| Q3, 2018 | $0.46 | $0.46 | 0% | Met |
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 −1.6%.
| Report Date | Price Day Prior | Price Next Day | Change % | Result |
|---|---|---|---|---|
| July 31, 2020 | $18.45 | $18.16 | −1.6% | Decline |
| April 29, 2020 | $19.09 | $18.65 | −2.3% | Decline |
| February 5, 2020 | $25.22 | $26.80 | 6.3% | Increase |
| October 30, 2019 | $21.88 | $23.06 | 5.4% | 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 −2.86, the model suggests that the company is not likely to be an earnings manipulator. A value of −2.86 implies a 0.2% chance of earnings manipulation.
Fundamentals And Technical Analysis
nVent Electric plc is currently trading at $19.12/share, down −3.9% for the day. The company is trading at approximately 66.5% of its 52-week high of $28.75/share. The company’s stock price is up 5.3% since the last earnings report and down −1.9% over the previous week. The company’s 14 Day Relative Price Index (RSI) of 51.65 suggests the company is trading in technically neutral territory. The RSI is considered overbought when above 70 and oversold when below 30.
The current share price implies a price-to-earnings (P/E) multiple of 21.69 and a forward P/E multiple of 13.89.
nVent Electric plc’s current share price also implies a price-to-book (P/B) multiple of 1.26. The following table summarizes some other key fundamental ratios:
| Metric | Value |
|---|---|
| Last Reported Fiscal Period Key | FY2020.Q2 |
| Period End Date | June 30, 2020 |
| Stock Price (Current) | $19.12 |
| P/E Ratio | 21.7x |
| P/E Ratio (Fwd) | 13.9x |
| PEG Ratio | −0.6 |
| Total Debt / Total Capital | 27.1% |
| Levered Free Cash Flow | $330.6 million |
| EV / EBITDA | 11.5x |
nVent Electric plc is a mid-cap stock with a market capitalization of $3.249 billion and a total enterprise value of $4.273 billion. The company operates in the Industrials sector and the Electrical Equipment industry.
nVent Electric plc designs, manufactures, markets, installs, and services electrical connection and protection products in the United States, Canada, Western and Eastern Europe included in European Union, China, Eastern Europe not included in European Union, Latin America, the Middle East, Southeast Asia, Australia, and Japan. The company operates through three segments: Enclosures, Thermal Management, and Electrical & Fastening Solutions. The Enclosures segment provides solutions to protect, connect, and manage heat in critical electronics, communication, control, and power equipment; physical infrastructure solutions to host, connect, and protect server and network equipment; and indoor and outdoor protection for test and measurement and aerospace and defense applications. Its products also include metallic and non-metallic enclosures, cabinets, subracks, and backplanes. The Thermal Management segment offers electric thermal solutions that connect and protect critical buildings, infrastructure, industrial processes, and people. Its thermal management systems comprise heat tracing, floor heating, fire-rated and specialty wiring, sensing, and snow melting and de-icing solutions. The Electrical & Fastening Solutions segment provides fastening solutions to connect and protect electrical and mechanical systems, and civil structures. It also provides engineered electrical and fastening products. The company sells its products under the CADDY, ERICO, HOFFMAN, RAYCHEM, SCHROFF, and TRACER brands. It markets its products through electrical distributors, data center contractors, original equipment manufacturers, and maintenance contractors. The company serves energy, industrial, infrastructure, and commercial and residential sectors. nVent Electric plc was founded in 1903 and is based in London, the United Kingdom.
