Analyst Estimates: Here's What Brokers Think Of Smurfit Kappa Group Plc (ISE:SK3) After Its Yearly Report

Last week saw the newest yearly earnings release from Smurfit Kappa Group Plc (ISE:SK3), an important milestone in the company's journey to build a stronger business. It was a credible result overall, with revenues of €8.5b and statutory earnings per share of €2.26 both in line with analyst estimates, showing that Smurfit Kappa Group is executing in line with 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. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

See our latest analysis for Smurfit Kappa Group

After the latest results, the nine analysts covering Smurfit Kappa Group are now predicting revenues of €8.89b in 2021. If met, this would reflect a satisfactory 4.3% improvement in sales compared to the last 12 months. Statutory earnings per share are predicted to increase 4.6% to €2.39. Before this earnings report, the analysts had been forecasting revenues of €8.79b and earnings per share (EPS) of €2.43 in 2021. So it's pretty clear that, although the analysts have updated their estimates, there's been no major change in expectations for the business following the latest results.

It will come as no surprise then, to learn that the consensus price target is largely unchanged at €44.30. 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. Currently, the most bullish analyst values Smurfit Kappa Group at €50.00 per share, while the most bearish prices it at €35.40. These price targets show that analysts do have some differing views on the business, but the estimates do not vary enough to suggest to us that some are betting on wild success or utter failure.

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. The analysts are definitely expecting Smurfit Kappa Group's growth to accelerate, with the forecast 4.3% growth ranking favourably alongside historical growth of 1.9% per annum over the past five years. Other similar companies in the industry (with analyst coverage) are also forecast to grow their revenue at 4.0% per year. Smurfit Kappa Group is expected to grow at about the same rate as its industry, so it's not clear that we can draw any conclusions from its growth relative to competitors.

The Bottom Line

The most obvious conclusion is that there's been no major change in the business' prospects in recent times, with the analysts holding their earnings forecasts steady, in line with previous estimates. They also reconfirmed their revenue estimates, with the company predicted to grow at about the same rate as 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. We have estimates - from multiple Smurfit Kappa Group analysts - going out to 2025, and you can see them free on our platform here.

You still need to take note of risks, for example - Smurfit Kappa Group has 3 warning signs we think you should be aware of.

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