Here's What Analysts Are Forecasting For PZ Cussons Plc (LON:PZC) After Its Full-Year Results

It's been a good week for PZ Cussons Plc (LON:PZC) shareholders, because the company has just released its latest yearly results, and the shares gained 4.2% to UK£2.01. Results were roughly in line with estimates, with revenues of UK£593m and statutory earnings per share of UK£0.12. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.

View our latest analysis for PZ Cussons

Following the latest results, PZ Cussons' four analysts are now forecasting revenues of UK£638.7m in 2023. This would be an okay 7.7% improvement in sales compared to the last 12 months. Per-share earnings are expected to increase 4.0% to UK£0.13. Yet prior to the latest earnings, the analysts had been anticipated revenues of UK£630.5m and earnings per share (EPS) of UK£0.13 in 2023. The analysts seem to have become a little more negative on the business after the latest results, given the small dip in their earnings per share numbers for next year.

The consensus price target held steady at UK£2.54, with the analysts seemingly voting that their lower forecast earnings are not expected to lead to a lower stock price in the foreseeable future. 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. The most optimistic PZ Cussons analyst has a price target of UK£3.12 per share, while the most pessimistic values it at UK£1.60. 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.

Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. One thing stands out from these estimates, which is that PZ Cussons is forecast to grow faster in the future than it has in the past, with revenues expected to display 7.7% annualised growth until the end of 2023. If achieved, this would be a much better result than the 7.5% annual decline over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in the industry are forecast to see their revenue grow 3.8% per year. So it looks like PZ Cussons is expected to grow faster than its competitors, at least for a while.

The Bottom Line

The most important thing to take away is that the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. Fortunately, they also reconfirmed their revenue numbers, suggesting sales are tracking in line with expectations - and our data suggests that revenues are expected to grow faster than the wider industry. The consensus price target held steady at UK£2.54, with the latest estimates not enough to have an impact on their price targets.

With that in mind, we wouldn't be too quick to come to a conclusion on PZ Cussons. Long-term earnings power is much more important than next year's profits. We have estimates - from multiple PZ Cussons analysts - going out to 2024, and you can see them free on our platform here.

Even so, be aware that PZ Cussons is showing 1 warning sign in our investment analysis , 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.