Wolverine World Wide, Inc. Just Missed Earnings With A Surprise Loss - Here Are Analysts Latest Forecasts

Investors in Wolverine World Wide, Inc. (NYSE:WWW) had a good week, as its shares rose 6.8% to close at US$9.88 following the release of its annual results. Things were not great overall, with a surprise (statutory) loss of US$0.51 per share on revenues of US$2.2b, even though the analysts had been expecting a profit. 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. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

See our latest analysis for Wolverine World Wide

After the latest results, the consensus from Wolverine World Wide's nine analysts is for revenues of US$1.71b in 2024, which would reflect a painful 24% decline in revenue compared to the last year of performance. Wolverine World Wide is also expected to turn profitable, with statutory earnings of US$0.72 per share. Before this earnings report, the analysts had been forecasting revenues of US$1.97b and earnings per share (EPS) of US$0.90 in 2024. It looks like sentiment has declined substantially in the aftermath of these results, with a real cut to revenue estimates and a substantial drop in earnings per share numbers as well.

Despite the cuts to forecast earnings, there was no real change to the US$9.21 price target, showing that the analysts don't think the changes have a meaningful impact on its intrinsic value. 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 Wolverine World Wide at US$11.00 per share, while the most bearish prices it at US$7.50. 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. We would highlight that revenue is expected to reverse, with a forecast 24% annualised decline to the end of 2024. That is a notable change from historical growth of 4.0% over the last five years. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 7.0% per year. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Wolverine World Wide is expected to lag 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 Wolverine World Wide. On the negative side, they also downgraded their revenue estimates, and forecasts imply they 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.

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 Wolverine World Wide going out to 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 Wolverine World Wide (at least 1 which can't be ignored) , and understanding these should be part of your investment process.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.