PUMA SE Just Missed Earnings - But Analysts Have Updated Their Models

It's been a sad week for PUMA SE (ETR:PUM), who've watched their investment drop 20% to €34.91 in the week since the company reported its half-year result. Revenues were in line with forecasts, at €4.2b, although statutory earnings per share came in 15% below what the analysts expected, at €0.86 per share. 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. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.

View our latest analysis for PUMA

Taking into account the latest results, the current consensus from PUMA's 20 analysts is for revenues of €8.83b in 2024. This would reflect a credible 3.7% increase on its revenue over the past 12 months. Statutory earnings per share are predicted to soar 26% to €2.21. Yet prior to the latest earnings, the analysts had been anticipated revenues of €8.90b and earnings per share (EPS) of €2.39 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.

It might be a surprise to learn that the consensus price target fell 6.5% to €50.52, with the analysts clearly linking lower forecast earnings to the performance of the stock price. 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. There are some variant perceptions on PUMA, with the most bullish analyst valuing it at €85.00 and the most bearish at €39.00 per share. 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.

One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. We would highlight that PUMA's revenue growth is expected to slow, with the forecast 7.6% annualised growth rate until the end of 2024 being well below the historical 13% 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) 7.5% annually. So it's pretty clear that, while PUMA'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 PUMA. Happily, there were no real changes to revenue forecasts, with the business still expected to grow in line with the overall industry. The consensus price target fell measurably, with the analysts seemingly not reassured by the latest results, leading to a lower estimate of PUMA's future valuation.

With that in mind, we wouldn't be too quick to come to a conclusion on PUMA. Long-term earnings power is much more important than next year's profits. We have forecasts for PUMA going out to 2026, and you can see them free on our platform here.

Plus, you should also learn about the 1 warning sign we've spotted with PUMA .

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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.