Earnings Release: Here's Why Analysts Cut Their The Hain Celestial Group, Inc. (NASDAQ:HAIN) Price Target To US$30.42

It's been a sad week for The Hain Celestial Group, Inc. (NASDAQ:HAIN), who've watched their investment drop 16% to US$21.28 in the week since the company reported its yearly result. Revenues of US$1.9b were in line with forecasts, although statutory earnings per share (EPS) came in below expectations at US$0.83, missing estimates by 3.5%. 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 Hain Celestial Group after the latest results.

View our latest analysis for Hain Celestial Group

Taking into account the latest results, Hain Celestial Group's nine analysts currently expect revenues in 2023 to be US$1.92b, approximately in line with the last 12 months. Statutory earnings per share are forecast to decline 10% to US$0.78 in the same period. In the lead-up to this report, the analysts had been modelling revenues of US$2.00b and earnings per share (EPS) of US$1.35 in 2023. From this we can that sentiment has definitely become more bearish after the latest results, leading to lower revenue forecasts and a large cut to earnings per share estimates.

The consensus price target fell 7.1% to US$30.42, with the weaker earnings outlook clearly leading valuation estimates. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. The most optimistic Hain Celestial Group analyst has a price target of US$42.00 per share, while the most pessimistic values it at US$24.00. Analysts definitely have varying views on the business, but the spread of estimates is not wide enough in our view to suggest that extreme outcomes could await Hain Celestial Group shareholders.

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. From these estimates it looks as though the analysts expect the years of declining sales to come to an end, given the flat revenue forecast out to 2023. That would be a definite improvement, given that the past five years have seen sales shrink 5.0% annually. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenue grow 2.6% per year. Although Hain Celestial Group's revenues are expected to improve, it seems that it is still expected to grow slower 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 Hain Celestial Group. On the negative side, they also downgraded their revenue estimates, and forecasts imply revenues will perform worse than the wider industry. Furthermore, the analysts also cut their price targets, suggesting that the latest news has led to greater pessimism about the intrinsic value of the business.

With that in mind, we wouldn't be too quick to come to a conclusion on Hain Celestial Group. Long-term earnings power is much more important than next year's profits. We have estimates - from multiple Hain Celestial Group analysts - going out to 2025, and you can see them free on our platform here.

Even so, be aware that Hain Celestial Group is showing 1 warning sign in our investment analysis , you should know about...

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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.