Hilton Food Group plc Just Beat Revenue Estimates By 12%

It's been a pretty great week for Hilton Food Group plc (LON:HFG) shareholders, with its shares surging 13% to UK£12.34 in the week since its latest full-year results. It was a mildly positive result, with revenues exceeding expectations at UK£2.8b, while statutory earnings per share (EPS) of UK£0.48 were in line with analyst forecasts. 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. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

View our latest analysis for Hilton Food Group

Taking into account the latest results, Hilton Food Group's eight analysts currently expect revenues in 2021 to be UK£2.83b, approximately in line with the last 12 months. Statutory earnings per share are predicted to increase 8.2% to UK£0.53. Before this earnings report, the analysts had been forecasting revenues of UK£2.78b and earnings per share (EPS) of UK£0.54 in 2021. 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 UK£13.74, with the analysts seemingly voting that their lower forecast earnings are not expected to lead to a lower stock price in the foreseeable future. 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. Currently, the most bullish analyst values Hilton Food Group at UK£14.50 per share, while the most bearish prices it at UK£10.50. With such a narrow range of valuations, the analysts apparently share similar views on what they think the business is worth.

One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. It's pretty clear that there is an expectation that Hilton Food Group's revenue growth will slow down substantially, with revenues to the end of 2021 expected to display 1.8% growth on an annualised basis. This is compared to a historical growth rate of 17% over the past five years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 5.3% annually. So it's pretty clear that, while revenue growth is expected to slow down, the wider industry is also expected to grow faster than Hilton Food Group.

The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Hilton Food Group. On the plus side, there were no major changes to revenue estimates; although forecasts imply revenues will perform worse than the wider industry. The consensus price target held steady at UK£13.74, with the latest estimates not enough to have an impact on their price targets.

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 Hilton Food Group analysts - going out to 2025, and you can see them free on our platform here.

And what about risks? Every company has them, and we've spotted 1 warning sign for Hilton Food Group you should know about.

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