Danone S.A. Just Beat Earnings Expectations: Here's What Analysts Think Will Happen Next

Investors in Danone S.A. (EPA:BN) had a good week, as its shares rose 4.2% to close at €61.54 following the release of its half-yearly results. Danone reported €14b in revenue, roughly in line with analyst forecasts, although statutory earnings per share (EPS) of €1.89 beat expectations, being 9.2% higher than what the analysts expected. 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. 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

Taking into account the latest results, Danone's 19 analysts currently expect revenues in 2024 to be €27.5b, approximately in line with the last 12 months. Per-share earnings are expected to leap 123% to €3.48. Yet prior to the latest earnings, the analysts had been anticipated revenues of €27.4b and earnings per share (EPS) of €3.42 in 2024. So it's pretty clear that, although the analysts have updated their estimates, there's been no major change in expectations for the business following the latest results.

There were no changes to revenue or earnings estimates or the price target of €63.67, suggesting that the company has met expectations in its recent result. 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. There are some variant perceptions on Danone, with the most bullish analyst valuing it at €72.00 and the most bearish at €55.00 per share. This is a very narrow spread of estimates, implying either that Danone is an easy company to value, or - more likely - the analysts are relying heavily on some key assumptions.

Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. It's pretty clear that there is an expectation that Danone's revenue growth will slow down substantially, with revenues to the end of 2024 expected to display 1.9% growth on an annualised basis. This is compared to a historical growth rate of 3.2% 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 3.0% per year. Factoring in the forecast slowdown in growth, it seems obvious that Danone is also expected to grow slower than other industry participants.

The Bottom Line

The most important thing to take away is that there's been no major change in sentiment, with the analysts reconfirming that the business is performing in line with their previous earnings per share estimates. 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 estimates - from multiple Danone analysts - going out to 2026, and you can see them free on our platform here.

And what about risks? Every company has them, and we've spotted 3 warning signs for Danone you should know about.

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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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com