Investors in Armstrong World Industries, Inc. (NYSE:AWI) had a good week, as its shares rose 2.5% to close at US$140 following the release of its quarterly results. It was a credible result overall, with revenues of US$387m and statutory earnings per share of US$1.75 both in line with analyst estimates, showing that Armstrong World Industries is executing in line with expectations. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Armstrong World Industries after the latest results.

See our latest analysis for Armstrong World Industries

Following the latest results, Armstrong World Industries' eight analysts are now forecasting revenues of US$1.53b in 2025. This would be a decent 9.8% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to ascend 18% to US$6.76. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$1.52b and earnings per share (EPS) of US$6.65 in 2025. 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.

With the analysts reconfirming their revenue and earnings forecasts, it's surprising to see that the price target rose 5.7% to US$147. It looks as though they previously had some doubts over whether the business would live up to their expectations. 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$163 per share, while the most bearish prices it at US$122. The narrow spread of estimates could suggest that the business' future is relatively easy to value, or thatthe analysts have a strong view on its prospects.

Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. We can infer from the latest estimates that forecasts expect a continuation of Armstrong World Industries'historical trends, as the 7.7% annualised revenue growth to the end of 2025 is roughly in line with the 7.6% annual growth over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenues grow 4.5% per year. So it's pretty clear that Armstrong World Industries is forecast to grow substantially faster than its industry.

The Bottom Line

The most important thing to take away is that there's been no major change in sentiment, with the analysts reconfirming that the business is performing in line with their previous earnings per share estimates. Happily, there were no major changes to revenue forecasts, with the business still expected to grow faster than the wider industry. We note an upgrade to the price target, suggesting that the analysts believes the intrinsic value of the business is likely to improve over time.

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 forecasts for Armstrong World Industries going out to 2026, and you can see them free on our platform here.

Don't forget that there may still be risks. For instance, we've identified 1 warning sign for Armstrong World Industries that you should be aware of.

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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.