Kontoor Brands, Inc. Just Recorded A 16% EPS Beat: Here's What Analysts Are Forecasting Next

As you might know, Kontoor Brands, Inc. (NYSE:KTB) just kicked off its latest quarterly results with some very strong numbers. Kontoor Brands beat earnings, with revenues hitting US$631m, ahead of expectations, and statutory earnings per share outperforming analyst reckonings by a solid 16%. 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. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Kontoor Brands after the latest results.

See our latest analysis for Kontoor Brands

Following last week's earnings report, Kontoor Brands' six analysts are forecasting 2024 revenues to be US$2.60b, approximately in line with the last 12 months. Statutory earnings per share are predicted to climb 15% to US$4.62. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$2.59b and earnings per share (EPS) of US$4.59 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 consensus price target rose 13% to US$73.00despite there being no meaningful change to earnings estimates. It could be that the analystsare reflecting the predictability of Kontoor Brands' earnings by assigning a price premium. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. Currently, the most bullish analyst values Kontoor Brands at US$88.00 per share, while the most bearish prices it at US$42.00. Note the wide gap in analyst price targets? This implies to us that there is a fairly broad range of possible scenarios for the underlying business.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Kontoor Brands' past performance and to peers in the same industry. We can infer from the latest estimates that forecasts expect a continuation of Kontoor Brands'historical trends, as the 1.5% annualised revenue growth to the end of 2024 is roughly in line with the 1.3% annual growth over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenues grow 6.0% per year. So although Kontoor Brands is expected to maintain its revenue growth rate, it's forecast 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 they will perform worse than the wider industry. There was also a nice increase in the price target, with the analysts clearly feeling that the intrinsic value of the business is improving.

With that in mind, we wouldn't be too quick to come to a conclusion on Kontoor Brands. Long-term earnings power is much more important than next year's profits. We have forecasts for Kontoor Brands 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 2 warning signs for Kontoor Brands 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.