AU$18.10 - That's What Analysts Think Brambles Limited (ASX:BXB) Is Worth After These Results

Shareholders of Brambles Limited (ASX:BXB) will be pleased this week, given that the stock price is up 17% to AU$18.03 following its latest annual results. Brambles reported US$6.7b in revenue, roughly in line with analyst forecasts, although statutory earnings per share (EPS) of US$0.56 beat expectations, being 3.6% higher than what the analysts expected. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.

See our latest analysis for Brambles

Following the latest results, Brambles' 15 analysts are now forecasting revenues of US$6.97b in 2025. This would be a credible 3.3% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to expand 11% to US$0.62. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$6.95b and earnings per share (EPS) of US$0.60 in 2025. The analysts seems to have become more bullish on the business, judging by their new earnings per share estimates.

The analysts have been lifting their price targets on the back of the earnings upgrade, with the consensus price target rising 15% to AU$18.10. 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. There are some variant perceptions on Brambles, with the most bullish analyst valuing it at AU$22.04 and the most bearish at AU$13.20 per share. Note the wide gap in analyst price targets? This implies to us that there is a fairly broad range of possible scenarios for the underlying business.

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. We would highlight that Brambles' revenue growth is expected to slow, with the forecast 3.3% annualised growth rate until the end of 2025 being well below the historical 7.8% p.a. growth over the last five years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 4.5% annually. So it's pretty clear that, while revenue growth is expected to slow down, the wider industry is also expected to grow faster than Brambles.

The Bottom Line

The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around Brambles' earnings potential next year. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting that it's tracking in line with expectations. Although our data does suggest that Brambles' revenue is expected to perform worse than the wider industry. There was also a nice increase in the price target, with the analysts clearly feeling that the intrinsic value of the business is improving.

With that in mind, we wouldn't be too quick to come to a conclusion on Brambles. Long-term earnings power is much more important than next year's profits. We have forecasts for Brambles going out to 2027, and you can see them free on our platform here.

You still need to take note of risks, for example - Brambles has 2 warning signs we think 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.