Leonardo DRS, Inc.( NASDAQ:DRS ) just released its latest first-quarter results and things are looking bullish. It was overall a positive result, with revenues beating expectations by 2.6% to hit US$846m. Leonardo DRS also reported a statutory profit of US$0.23, which was an impressive 25% above what the analysts had forecast. 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 thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.
Taking into account the latest results, the most recent consensus for Leonardo DRS from ten analysts is for revenues of US$3.93b in 2026. If met, it would imply a credible 6.3% increase on its revenue over the past 12 months. Statutory earnings per share are predicted to grow 12% to US$1.22. Before this earnings report, the analysts had been forecasting revenues of US$3.91b and earnings per share (EPS) of US$1.20 in 2026. So it's pretty clear that, although the analysts have updated their estimates, there's been no major change in expectations for the business following the latest results.
Check out our latest analysis for Leonardo DRS
There were no changes to revenue or earnings estimates or the price target of US$52.40, suggesting that the company has met expectations in its recent result. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. The most optimistic Leonardo DRS analyst has a price target of US$59.00 per share, while the most pessimistic values it at US$47.00. Even so, with a relatively close grouping of estimates, it looks like the analysts are quite confident in their valuations, suggesting Leonardo DRS is an easy business to forecast or the the analysts are all using similar assumptions.
Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. It's clear from the latest estimates that Leonardo DRS' rate of growth is expected to accelerate meaningfully, with the forecast 8.5% annualised revenue growth to the end of 2026 noticeably faster than its historical growth of 5.8% p.a. over the past five years. Other similar companies in the industry (with analyst coverage) are also forecast to grow their revenue at 8.8% per year. Leonardo DRS is expected to grow at about the same rate as its industry, so it's not clear that we can draw any conclusions from its growth relative to competitors.
The Bottom Line
The most obvious conclusion is that there's been no major change in the business' prospects in recent times, with the analysts holding their earnings forecasts steady, in line with previous estimates. 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$52.40, with the latest estimates not enough to have an impact on their price targets.
Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. We have forecasts for Leonardo DRS going out to 2028, and you can see them free on our platform here.
It is also worth noting that we have found 1 warning sign for Leonardo DRS that you need to take into consideration.
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.
