Pernod Ricard SA Just Beat EPS By 29%: Here's What Analysts Think Will Happen Next

Pernod Ricard SA (EPA:RI) just released its half-yearly report and things are looking bullish. The company beat both earnings and revenue forecasts, with revenue of €6.0b, some 2.7% above estimates, and statutory earnings per share (EPS) coming in at €5.33, 29% ahead of expectations. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.

View our latest analysis for Pernod Ricard

Taking into account the latest results, the current consensus from Pernod Ricard's 19 analysts is for revenues of €10.3b in 2022, which would reflect a satisfactory 4.9% increase on its sales over the past 12 months. Per-share earnings are expected to expand 14% to €7.62. Before this earnings report, the analysts had been forecasting revenues of €10.1b and earnings per share (EPS) of €7.11 in 2022. So there seems to have been a moderate uplift in sentiment following the latest results, given the upgrades to both revenue and earnings per share forecasts for next year.

Despite these upgrades,the analysts have not made any major changes to their price target of €222, suggesting that the higher estimates are not likely to have a long term impact on what the stock is worth. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. Currently, the most bullish analyst values Pernod Ricard at €280 per share, while the most bearish prices it at €152. 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.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Pernod Ricard's past performance and to peers in the same industry. It's clear from the latest estimates that Pernod Ricard's rate of growth is expected to accelerate meaningfully, with the forecast 10% annualised revenue growth to the end of 2022 noticeably faster than its historical growth of 0.02% p.a. over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 6.1% annually. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect Pernod Ricard to grow faster than the wider industry.

The Bottom Line

The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around Pernod Ricard's earnings potential next year. Happily, they also upgraded their revenue estimates, and are forecasting revenues to grow faster 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. At Simply Wall St, we have a full range of analyst estimates for Pernod Ricard going out to 2024, and you can see them free on our platform here..

And what about risks? Every company has them, and we've spotted 2 warning signs for Pernod Ricard 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.