Orora Limited Just Missed EPS By 41%: Here's What Analysts Think Will Happen Next

It's shaping up to be a tough period for Orora Limited (ASX:ORA), which a week ago released some disappointing half-year results that could have a notable impact on how the market views the stock. It wasn't a great result overall - while revenue fell marginally short of analyst estimates at AU$2.0b, statutory earnings missed forecasts by an incredible 41%, coming in at just AU$0.059 per share. 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. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Orora after the latest results.

See our latest analysis for Orora

Taking into account the latest results, the most recent consensus for Orora from twelve analysts is for revenues of AU$4.78b in 2024. If met, it would imply a notable 15% increase on its revenue over the past 12 months. Statutory earnings per share are predicted to jump 63% to AU$0.18. Before this earnings report, the analysts had been forecasting revenues of AU$5.00b and earnings per share (EPS) of AU$0.20 in 2024. The analysts seem less optimistic after the recent results, reducing their revenue forecasts and making a real cut to earnings per share numbers.

Despite the cuts to forecast earnings, there was no real change to the AU$3.07 price target, showing that the analysts don't think the changes have a meaningful impact on its intrinsic value. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. There are some variant perceptions on Orora, with the most bullish analyst valuing it at AU$3.50 and the most bearish at AU$2.70 per share. This is a very narrow spread of estimates, implying either that Orora is an easy company to value, or - more likely - the analysts are relying heavily on some key assumptions.

Of course, another way to look at these forecasts is to place them into context against the industry itself. It's clear from the latest estimates that Orora's rate of growth is expected to accelerate meaningfully, with the forecast 32% annualised revenue growth to the end of 2024 noticeably faster than its historical growth of 4.2% p.a. over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 4.3% annually. Factoring in the forecast acceleration in revenue, it's pretty clear that Orora is expected to grow much faster than its industry.

The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Orora. They also downgraded Orora's revenue estimates, but industry data suggests that it is expected to grow faster than the wider industry. The consensus price target held steady at AU$3.07, with the latest estimates not enough to have an impact on their price targets.

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. We have forecasts for Orora going out to 2026, and you can see them free on our platform here.

Plus, you should also learn about the 4 warning signs we've spotted with Orora (including 3 which can't be ignored) .

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.