Earnings Report: Newlat Food S.p.A. Missed Revenue Estimates By 7.0%

Shareholders might have noticed that Newlat Food S.p.A. (BIT:NWL) filed its half-year result this time last week. The early response was not positive, with shares down 6.0% to €11.22 in the past week. Results look mixed - while revenue fell marginally short of analyst estimates at €370m, statutory earnings were in line with expectations, at €0.34 per share. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.

See our latest analysis for Newlat Food

Taking into account the latest results, the consensus forecast from Newlat Food's twin analysts is for revenues of €2.72b in 2024. This reflects a substantial 262% improvement in revenue compared to the last 12 months. Per-share earnings are expected to leap 135% to €0.71. Before this earnings report, the analysts had been forecasting revenues of €2.83b and earnings per share (EPS) of €0.29 in 2024. Although the analysts have lowered their revenue forecasts, they've also made a sizeable expansion in their earnings per share estimates, which implies there's been something of an uptick in sentiment following the latest results.

The average price target rose 25% to €14.20, with the analysts signalling that the improved earnings outlook is the key driver of value for shareholders - enough to offset the reduction in revenue estimates.

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 Newlat Food's growth to accelerate, with the forecast 12x annualised growth to the end of 2024 ranking favourably alongside historical growth of 22% per annum over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 13% per year. Factoring in the forecast acceleration in revenue, it's pretty clear that Newlat Food is expected to grow much faster than its industry.

The Bottom Line

The most important thing here is that the analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards Newlat Food following these results. Regrettably, they also downgraded their revenue estimates, but the latest forecasts still imply the business will grow faster than the wider industry. Still, earnings per share are more important to value creation for shareholders. There was also a nice increase in the price target, with the analysts clearly feeling that the intrinsic value of the business is improving.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have analyst estimates for Newlat Food going out as far as 2026, and you can see them free on our platform here.

That said, it's still necessary to consider the ever-present spectre of investment risk. We've identified 2 warning signs with Newlat Food (at least 1 which is significant) , and understanding these should be part of your investment process.

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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.