Bega Cheese Limited (ASX:BGA) Released Earnings Last Week And Analysts Lifted Their Price Target To AU$5.60

Shareholders might have noticed that Bega Cheese Limited (ASX:BGA) filed its interim result this time last week. The early response was not positive, with shares down 6.8% to AU$5.49 in the past week. Results were roughly in line with estimates, with revenues of AU$1.8b and statutory earnings per share of AU$0.098. 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. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.

Check out our latest analysis for Bega Cheese

Following last week's earnings report, Bega Cheese's nine analysts are forecasting 2025 revenues to be AU$3.63b, approximately in line with the last 12 months. Statutory earnings per share are predicted to jump 47% to AU$0.16. Before this earnings report, the analysts had been forecasting revenues of AU$3.64b and earnings per share (EPS) of AU$0.17 in 2025. The analysts seem to have become a little more negative on the business after the latest results, given the minor downgrade to their earnings per share numbers for next year.

Despite cutting their earnings forecasts,the analysts have lifted their price target 13% to AU$5.60, suggesting that these impacts are not expected to weigh on the stock's value in the long term. 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. The most optimistic Bega Cheese analyst has a price target of AU$7.00 per share, while the most pessimistic values it at AU$4.00. This shows there is still a bit of diversity in estimates, but analysts don't appear to be totally split on the stock as though it might be a success or failure situation.

Of course, another way to look at these forecasts is to place them into context against the industry itself. We would highlight that Bega Cheese's revenue growth is expected to slow, with the forecast 3.2% annualised growth rate until the end of 2025 being well below the historical 19% 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 6.4% 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 Bega Cheese.

The Bottom Line

The most important thing to take away is that the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting that it's tracking in line with expectations. Although our data does suggest that Bega Cheese's 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 Bega Cheese. Long-term earnings power is much more important than next year's profits. We have estimates - from multiple Bega Cheese analysts - going out to 2027, and you can see them free on our platform here.

Before you take the next step you should know about the 1 warning sign for Bega Cheese that we have uncovered.

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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.