Danone S.A. (EPA:BN) Just Released Its Half-Yearly Earnings: Here's What Analysts Think

Danone S.A. (EPA:BN) last week reported its latest half-year results, which makes it a good time for investors to dive in and see if the business is performing in line with expectations. Danone reported in line with analyst predictions, delivering revenues of €14b and statutory earnings per share of €1.70, suggesting the business is executing well and in line with its plan. 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.

Check out our latest analysis for Danone

Following the recent earnings report, the consensus from 22 analysts covering Danone is for revenues of €27.9b in 2023. This implies a discernible 2.1% decline in revenue compared to the last 12 months. Per-share earnings are expected to bounce 53% to €3.12. In the lead-up to this report, the analysts had been modelling revenues of €28.0b and earnings per share (EPS) of €3.23 in 2023. 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 €60.38, with the analysts seemingly voting that their lower forecast earnings are not expected to lead to a lower stock price in the foreseeable future. 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 Danone, with the most bullish analyst valuing it at €71.00 and the most bearish at €43.00 per share. This shows there is still a bit of diversity in estimates, but analysts don't appear to be totally split on the stock as though it might be a success or failure situation.

Of course, another way to look at these forecasts is to place them into context against the industry itself. These estimates imply that revenue is expected to slow, with a forecast annualised decline of 4.2% by the end of 2023. This indicates a significant reduction from annual growth of 2.0% over the last five years. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 1.9% per year. It's pretty clear that Danone's revenues are expected to perform substantially worse than the wider industry.

The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Danone. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting that it's tracking in line with expectations. Although our data does suggest that Danone's revenue is expected to 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 in mind, we wouldn't be too quick to come to a conclusion on Danone. Long-term earnings power is much more important than next year's profits. We have forecasts for Danone going out to 2025, and you can see them free on our platform here.

Before you take the next step you should know about the 3 warning signs for Danone that we have uncovered.

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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.