The Glanbia plc (ISE:GL9) Analysts Have Been Trimming Their Sales Forecasts

Today is shaping up negative for Glanbia plc (ISE:GL9) shareholders, with the analysts delivering a substantial negative revision to this year's forecasts. Revenue estimates were cut sharply as the analysts signalled a weaker outlook - perhaps a sign that investors should temper their expectations as well.

Following the downgrade, the consensus from eight analysts covering Glanbia is for revenues of US$4.4b in 2024, implying an uneasy 20% decline in sales compared to the last 12 months. Statutory earnings per share are supposed to decline 10% to US$1.20 in the same period. Before this latest update, the analysts had been forecasting revenues of US$5.4b and earnings per share (EPS) of US$1.17 in 2024. It looks like there's been a meaningful change to the consensus view following the recent earnings report, with the analysts making a substantial drop in to revenue forecasts and a slight bump in to this year's earnings estimates.

View our latest analysis for Glanbia

There was no real change to the average price target of €20.46, with the lower revenue and higher earnings forecasts not expected to meaningfully impact the company's valuation over a longer timeframe.

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 sales are expected to reverse, with a forecast 20% annualised revenue decline to the end of 2024. That is a notable change from historical growth of 9.6% 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 4.0% per year. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Glanbia is expected to lag the wider industry.

The Bottom Line

The most important thing to take away from this upgrade is that analysts upgraded their earnings per share estimates for this year, expecting improving business conditions. Unfortunately analysts also downgraded their revenue estimates, and industry data suggests that Glanbia's revenues are expected to grow slower than the wider market. Overall, given the drastic downgrade to this year's forecasts, we'd be feeling a little more wary of Glanbia going forwards.

Even so, the longer term trajectory of the business is much more important for the value creation of shareholders. We have estimates - from multiple Glanbia analysts - going out to 2026, and you can see them free on our platform here.

Another way to search for interesting companies that could be reaching an inflection point is to track whether management are buying or selling, with our free list of growing companies that insiders are buying.

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

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.