Brambles Limited Beat Analyst Estimates: See What The Consensus Is Forecasting For This Year

A week ago, Brambles Limited (ASX:BXB) came out with a strong set of yearly numbers that could potentially lead to a re-rate of the stock. The company beat expectations with revenues of US$5.8b arriving 4.1% ahead of forecasts. Statutory earnings per share (EPS) were US$0.42, 5.0% ahead of estimates. 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. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.

See our latest analysis for Brambles

Following last week's earnings report, Brambles' 17 analysts are forecasting 2023 revenues to be US$5.94b, approximately in line with the last 12 months. Statutory earnings per share are predicted to accumulate 7.6% to US$0.44. Before this earnings report, the analysts had been forecasting revenues of US$5.86b and earnings per share (EPS) of US$0.41 in 2023. 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 7.0% to AU$12.78. 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. Currently, the most bullish analyst values Brambles at AU$14.33 per share, while the most bearish prices it at AU$10.01. 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.

Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. We would highlight that Brambles' revenue growth is expected to slow, with the forecast 1.8% annualised growth rate until the end of 2023 being well below the historical 2.6% p.a. growth over the last five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 4.9% per year. 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 most important thing here is that the analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards Brambles following these results. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting sales are tracking in line with expectations - although our data does suggest that Brambles' revenues are expected to perform worse 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.

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. At Simply Wall St, we have a full range of analyst estimates for Brambles going out to 2025, and you can see them free on our platform here..

You should always think about risks though. Case in point, we've spotted 3 warning signs for Brambles 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.