Royal Unibrew A/S Just Recorded A 14% EPS Beat: Here's What Analysts Are Forecasting Next

A week ago, Royal Unibrew A/S (CPH:RBREW) came out with a strong set of quarterly numbers that could potentially lead to a re-rate of the stock. Royal Unibrew beat earnings, with revenues hitting kr.2.3b, ahead of expectations, and statutory earnings per share outperforming analyst reckonings by a solid 14%. 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.

View our latest analysis for Royal Unibrew

Following the latest results, Royal Unibrew's eight analysts are now forecasting revenues of kr.7.97b in 2021. This would be a reasonable 4.7% improvement in sales compared to the last 12 months. Statutory earnings per share are predicted to climb 15% to kr.25.60. Yet prior to the latest earnings, the analysts had been anticipated revenues of kr.7.94b and earnings per share (EPS) of kr.25.16 in 2021. The consensus analysts don't seem to have seen anything in these results that would have changed their view on the business, given there's been no major change to their estimates.

The consensus price target rose 5.9% to kr.704despite there being no meaningful change to earnings estimates. It could be that the analystsare reflecting the predictability of Royal Unibrew's earnings by assigning a price premium. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. There are some variant perceptions on Royal Unibrew, with the most bullish analyst valuing it at kr.775 and the most bearish at kr.570 per share. The narrow spread of estimates could suggest that the business' future is relatively easy to value, or thatthe analysts have a strong view on its prospects.

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. Next year brings more of the same, according to the analysts, with revenue forecast to grow 4.7%, in line with its 5.7% annual growth over the past five years. Juxtapose this against our data, which suggests that other companies (with analyst coverage) in the industry are forecast to see their revenues grow 5.1% per year. So although Royal Unibrew is expected to maintain its revenue growth rate, it's only growing at about the rate of the wider industry.

The Bottom Line

The most obvious conclusion is that there's been no major change in the business' prospects in recent times, with the analysts holding their earnings forecasts steady, in line with previous estimates. They also reconfirmed their revenue estimates, with the company predicted to grow at about the same rate as 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 said, the long-term trajectory of the company's earnings is a lot more important than next year. We have estimates - from multiple Royal Unibrew analysts - going out to 2024, and you can see them free on our platform here.

That said, it's still necessary to consider the ever-present spectre of investment risk. We've identified 2 warning signs with Royal Unibrew , and understanding these should be part of your investment process.

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This article by Simply Wall St is general in nature. 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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