Givaudan SA Earnings Missed Analyst Estimates: Here's What Analysts Are Forecasting Now

Givaudan SA (VTX:GIVN) last week reported its latest full-year results, which makes it a good time for investors to dive in and see if the business is performing in line with expectations. It looks like the results were a bit of a negative overall. While revenues of CHF6.3b were in line with analyst predictions, statutory earnings were less than expected, missing estimates by 5.9% to hit CHF79.96 per share. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.

See our latest analysis for Givaudan

Following the latest results, Givaudan's 23 analysts are now forecasting revenues of CHF6.59b in 2021. This would be a satisfactory 4.3% improvement in sales compared to the last 12 months. Per-share earnings are expected to grow 11% to CHF89.62. Yet prior to the latest earnings, the analysts had been anticipated revenues of CHF6.63b and earnings per share (EPS) of CHF92.90 in 2021. The analysts seem to have become a little more negative on the business after the latest results, given the small dip in their earnings per share numbers for next year.

It might be a surprise to learn that the consensus price target was broadly unchanged at CHF3,593, with the analysts clearly implying that the forecast decline in earnings is not expected to have much of an impact on valuation. 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. Currently, the most bullish analyst values Givaudan at CHF4,500 per share, while the most bearish prices it at CHF2,250. 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.

Of course, another way to look at these forecasts is to place them into context against the industry itself. It's pretty clear that there is an expectation that Givaudan's revenue growth will slow down substantially, with revenues next year expected to grow 4.3%, compared to a historical growth rate of 8.3% over the past five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 6.0% 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 Givaudan.

The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Givaudan. On the plus side, there were no major changes to revenue estimates; although forecasts imply revenues will perform worse than 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.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have estimates - from multiple Givaudan analysts - going out to 2025, and you can see them free on our platform here.

Even so, be aware that Givaudan is showing 1 warning sign in our investment analysis , you should know about...

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