George Weston Limited (TSE:WN) Just Released Its Second-Quarter Earnings: Here's What Analysts Think

George Weston Limited (TSE:WN) came out with its second-quarter results last week, and we wanted to see how the business is performing and what industry forecasters think of the company following this report. It was a credible result overall, with revenues of CA$14b and statutory earnings per share of CA$10.75 both in line with analyst estimates, showing that George Weston is executing in line with expectations. 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.

View our latest analysis for George Weston

Following last week's earnings report, George Weston's four analysts are forecasting 2024 revenues to be CA$61.9b, approximately in line with the last 12 months. Statutory earnings per share are predicted to surge 25% to CA$11.45. In the lead-up to this report, the analysts had been modelling revenues of CA$62.5b and earnings per share (EPS) of CA$12.20 in 2024. So it looks like there's been a small decline in overall sentiment after the recent results - there's been no major change to revenue estimates, but the analysts did make a small dip in their earnings per share forecasts.

The consensus price target held steady at CA$221, with the analysts seemingly voting that their lower forecast earnings are not expected to lead to a lower stock price in the foreseeable future. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. The most optimistic George Weston analyst has a price target of CA$254 per share, while the most pessimistic values it at CA$175. Analysts definitely have varying views on the business, but the spread of estimates is not wide enough in our view to suggest that extreme outcomes could await George Weston shareholders.

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 George Weston's revenue growth is expected to slow, with the forecast 3.1% annualised growth rate until the end of 2024 being well below the historical 4.3% p.a. growth over the last five years. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 3.4% annually. So it's pretty clear that, while George Weston's revenue growth is expected to slow, it's expected to grow roughly in line with the industry.

The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for George Weston. They also reconfirmed their revenue estimates, with the company predicted to grow at about the same rate as the wider industry. 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.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have forecasts for George Weston going out to 2026, and you can see them free on our platform here.

It is also worth noting that we have found 2 warning signs for George Weston that you need to take into consideration.

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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.

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