Earnings Update: Almarai Company (TADAWUL:2280) Just Reported Its Yearly Results And Analysts Are Updating Their Forecasts

The yearly results for Almarai Company (TADAWUL:2280) were released last week, making it a good time to revisit its performance. Results were roughly in line with estimates, with revenues of ر.س15b and statutory earnings per share of ر.س1.98. 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.

Check out our latest analysis for Almarai

Following the latest results, Almarai's nine analysts are now forecasting revenues of ر.س15.8b in 2021. This would be a modest 3.1% improvement in sales compared to the last 12 months. Statutory per-share earnings are expected to be ر.س2.05, roughly flat on the last 12 months. Before this earnings report, the analysts had been forecasting revenues of ر.س15.8b and earnings per share (EPS) of ر.س2.04 in 2021. 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.

It will come as no surprise then, to learn that the consensus price target is largely unchanged at ر.س52.26. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. Currently, the most bullish analyst values Almarai at ر.س61.00 per share, while the most bearish prices it at ر.س44.00. As you can see, analysts are not all in agreement on the stock's future, but the range of estimates is still reasonably narrow, which could suggest that the outcome is not totally unpredictable.

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. The analysts are definitely expecting Almarai's growth to accelerate, with the forecast 3.1% growth ranking favourably alongside historical growth of 1.0% 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 5.1% per year. It seems obvious that, while the future growth outlook is brighter than the recent past, Almarai is expected to grow slower than the wider industry.

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 revenues will perform worse than 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 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 2025, and you can see them free on our platform here.

However, before you get too enthused, we've discovered 1 warning sign for Almarai that you should be aware of.

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This article by Simply Wall St is general in nature. 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.
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