Analysts Are Updating Their Almarai Company (TADAWUL:2280) Estimates After Its First-Quarter Results

Last week, you might have seen that Almarai Company (TADAWUL:2280) released its quarterly result to the market. The early response was not positive, with shares down 2.1% to ر.س56.70 in the past week. It was a workmanlike result, with revenues of ر.س5.5b coming in 2.5% ahead of expectations, and statutory earnings per share of ر.س2.05, in line with analyst appraisals. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.

See our latest analysis for Almarai

After the latest results, the 13 analysts covering Almarai are now predicting revenues of ر.س20.8b in 2024. If met, this would reflect a credible 3.9% improvement in revenue compared to the last 12 months. Per-share earnings are expected to swell 12% to ر.س2.36. In the lead-up to this report, the analysts had been modelling revenues of ر.س20.8b and earnings per share (EPS) of ر.س2.38 in 2024. The consensus analysts don't seem to have seen anything in these results that would have changed their view on the business, given there's been no major change to their estimates.

The analysts reconfirmed their price target of ر.س63.72, showing that the business is executing well and in line with expectations. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. There are some variant perceptions on Almarai, with the most bullish analyst valuing it at ر.س71.00 and the most bearish at ر.س55.00 per share. Even so, with a relatively close grouping of estimates, it looks like the analysts are quite confident in their valuations, suggesting Almarai is an easy business to forecast or the the analysts are all using similar assumptions.

Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. We would highlight that Almarai's revenue growth is expected to slow, with the forecast 5.3% annualised growth rate until the end of 2024 being well below the historical 8.2% p.a. growth over the last five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 7.1% per year. Factoring in the forecast slowdown in growth, it seems obvious that Almarai is also expected to grow slower than other industry participants.

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. On the plus side, there were no major changes to revenue estimates; although forecasts imply they will perform worse than the wider industry. The consensus price target held steady at ر.س63.72, 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 Almarai. Long-term earnings power is much more important than next year's profits. We have estimates - from multiple Almarai analysts - going out to 2026, and you can see them free on our platform here.

We don't want to rain on the parade too much, but we did also find 1 warning sign for Almarai that you need to be mindful of.

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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.