AptarGroup, Inc. (NYSE:ATR) shares fell 4.0% to US$112 in the week since its latest annual results. It looks like the results were a bit of a negative overall. While revenues of US$2.9b were in line with analyst predictions, statutory earnings were less than expected, missing estimates by 2.9% to hit US$3.66 per share. Earnings are an important time for investors, as they can track a company’s performance, look at what top analysts are forecasting for next year, and see if there’s been a change in sentiment towards the company. So we gathered the latest post-earnings forecasts to see what analysts’ statutory forecasts suggest is in store for next year.
Following the latest results, AptarGroup’s ten analysts are now forecasting revenues of US$2.96b in 2020. This would be a credible 3.6% improvement in sales compared to the last 12 months. Statutory per-share earnings are expected to be US$3.81, roughly flat on the last 12 months. In the lead-up to this report, analysts had been modelling revenues of US$2.98b and earnings per share (EPS) of US$4.30 in 2020. So there’s definitely been a decline in analyst sentiment after the latest results, noting the real cut to new EPS forecasts.
It might be a surprise to learn that the consensus price target was broadly unchanged at US$118, with analysts clearly implying that the forecast decline in earnings is not expected to have much of an impact on valuation. There’s another way to think about price targets though, and that’s to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. Currently, the most bullish analyst values AptarGroup at US$136 per share, while the most bearish prices it at US$92.00. As you can see, analysts are not all in agreement on the stock’s future, but the range of estimates is still reasonably narrow, which could suggest that the outcome is not totally unpredictable.
Further, we can compare these estimates to past performance, and see how AptarGroup forecasts compare to the wider market’s forecast performance. Next year brings more of the same, according to analysts, with revenue forecast to grow 3.6%, in line with its 3.9% annual growth over the past five years. Compare this with the wider market, which analyst estimates (in aggregate) suggest will see revenues grow 2.8% next year. So it’s pretty clear that AptarGroup is forecast to grow substantially faster than its market.
The Bottom Line
The biggest concern with the new estimates is that analysts have reduced their earnings per share estimates, suggesting business headwinds could lay ahead for AptarGroup. Happily, there were no major changes to revenue forecasts, with analysts still expecting the business to grow faster than the wider market. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.
Still, the long-term prospects of the business are much more relevant than next year’s earnings. At Simply Wall St, we have a full range of analyst estimates for AptarGroup going out to 2023, and you can see them free on our platform here..
You can also view our analysis of AptarGroup’s balance sheet, and whether we think AptarGroup is carrying too much debt, for free on our platform here.
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