Results: J&J Snack Foods Corp. Beat Earnings Expectations And Analysts Now Have New Forecasts

J&J Snack Foods Corp. (NASDAQ:JJSF) just released its latest second-quarter results and things are looking bullish. The company beat forecasts, with revenue of US$360m, some 5.6% above estimates, and statutory earnings per share (EPS) coming in at US$0.69, 33% ahead of expectations. 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 J&J Snack Foods

Taking into account the latest results, J&J Snack Foods' five analysts currently expect revenues in 2024 to be US$1.59b, approximately in line with the last 12 months. Per-share earnings are expected to step up 11% to US$4.94. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$1.57b and earnings per share (EPS) of US$4.81 in 2024. So the consensus seems to have become somewhat more optimistic on J&J Snack Foods' earnings potential following these results.

There's been no major changes to the consensus price target of US$182, suggesting that the improved earnings per share outlook is not enough to have a long-term positive impact on the stock's valuation. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. There are some variant perceptions on J&J Snack Foods, with the most bullish analyst valuing it at US$205 and the most bearish at US$155 per share. Still, with such a tight range of estimates, it suggeststhe analysts have a pretty good idea of what they think the company is worth.

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. It's pretty clear that there is an expectation that J&J Snack Foods' revenue growth will slow down substantially, with revenues to the end of 2024 expected to display 1.0% growth on an annualised basis. This is compared to a historical growth rate of 8.0% over the past five years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 2.9% annually. Factoring in the forecast slowdown in growth, it seems obvious that J&J Snack Foods is also expected to grow slower than other industry participants.

The Bottom Line

The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around J&J Snack Foods' earnings potential next year. 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 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.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have forecasts for J&J Snack Foods going out to 2026, and you can see them free on our platform here.

You can also see our analysis of J&J Snack Foods' Board and CEO remuneration and experience, and whether company insiders have been buying stock.

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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.