Brunswick Corporation Just Missed EPS By 11%: Here's What Analysts Think Will Happen Next

It's been a good week for Brunswick Corporation (NYSE:BC) shareholders, because the company has just released its latest annual results, and the shares gained 3.3% to US$85.60. Revenues were in line with forecasts, at US$6.4b, although statutory earnings per share came in 11% below what the analysts expected, at US$5.96 per share. 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.

See our latest analysis for Brunswick

After the latest results, the consensus from Brunswick's 17 analysts is for revenues of US$6.09b in 2024, which would reflect a noticeable 4.9% decline in revenue compared to the last year of performance. Statutory earnings per share are predicted to expand 13% to US$7.09. Before this earnings report, the analysts had been forecasting revenues of US$6.35b and earnings per share (EPS) of US$8.26 in 2024. The analysts seem less optimistic after the recent results, reducing their revenue forecasts and making a substantial drop in earnings per share numbers.

The analysts made no major changes to their price target of US$95.00, suggesting the downgrades are not expected to have a long-term impact on Brunswick's valuation. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. There are some variant perceptions on Brunswick, with the most bullish analyst valuing it at US$107 and the most bearish at US$74.00 per share. There are definitely some different views on the stock, but the range of estimates is not wide enough as to imply that the situation is unforecastable, in our view.

One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. These estimates imply that revenue is expected to slow, with a forecast annualised decline of 4.9% by the end of 2024. This indicates a significant reduction from annual growth of 13% over the last five years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 2.3% annually for the foreseeable future. It's pretty clear that Brunswick's revenues are expected to perform substantially worse than the wider industry.

The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Brunswick. Unfortunately, they also downgraded their revenue estimates, and our data indicates underperformance compared to the wider industry. Even so, earnings per share are more important to the intrinsic value of the business. 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.

Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. We have forecasts for Brunswick going out to 2026, and you can see them free on our platform here.

You still need to take note of risks, for example - Brunswick has 2 warning signs we think you should be aware 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.