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

Pernod Ricard SA (EPA:RI) last week reported its latest annual results, which makes it a good time for investors to dive in and see if the business is performing in line with expectations. It looks like a pretty bad result, all things considered. Although revenues of €12b were in line with analyst predictions, statutory earnings fell badly short, missing estimates by 29% to hit €5.83 per share. 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. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Pernod Ricard after the latest results.

Check out our latest analysis for Pernod Ricard

Following last week's earnings report, Pernod Ricard's 16 analysts are forecasting 2025 revenues to be €11.5b, approximately in line with the last 12 months. Statutory earnings per share are predicted to soar 30% to €7.65. In the lead-up to this report, the analysts had been modelling revenues of €11.9b and earnings per share (EPS) of €8.22 in 2025. It's pretty clear that pessimism has reared its head after the latest results, leading to a weaker revenue outlook and a minor downgrade to earnings per share estimates.

The analysts made no major changes to their price target of €150, suggesting the downgrades are not expected to have a long-term impact on Pernod Ricard's valuation. 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 Pernod Ricard, with the most bullish analyst valuing it at €200 and the most bearish at €119 per share. Analysts definitely have varying views on the business, but the spread of estimates is not wide enough in our view to suggest that extreme outcomes could await Pernod Ricard shareholders.

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. We would highlight that revenue is expected to reverse, with a forecast 0.8% annualised decline to the end of 2025. That is a notable change from historical growth of 7.8% 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 3.7% per year. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Pernod Ricard is expected to lag 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 Pernod Ricard. Unfortunately, they also downgraded their revenue estimates, and our data indicates underperformance compared to the wider industry. Even so, earnings per share are more important to the intrinsic value of the business. The consensus price target held steady at €150, with the latest estimates not enough to have an impact on their price targets.

Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. We have forecasts for Pernod Ricard going out to 2027, and you can see them free on our platform here.

You still need to take note of risks, for example - Pernod Ricard has 3 warning signs (and 1 which is significant) we think 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.