Nomad Foods Limited Just Missed EPS By 52%: Here's What Analysts Think Will Happen Next

Investors in Nomad Foods Limited (NYSE:NOMD) had a good week, as its shares rose 4.9% to close at US$19.50 following the release of its yearly results. Statutory earnings per share fell badly short of expectations, coming in at €0.15, some 52% below analyst forecasts, although revenues were okay, approximately in line with analyst estimates at €3.0b. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.

View our latest analysis for Nomad Foods

After the latest results, the seven analysts covering Nomad Foods are now predicting revenues of €3.15b in 2024. If met, this would reflect an okay 3.6% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to bounce 50% to €1.78. In the lead-up to this report, the analysts had been modelling revenues of €3.15b and earnings per share (EPS) of €1.79 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.

There were no changes to revenue or earnings estimates or the price target of US$24.14, suggesting that the company has met expectations in its recent result. 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. There are some variant perceptions on Nomad Foods, with the most bullish analyst valuing it at US$26.78 and the most bearish at US$22.05 per share. With such a narrow range of valuations, the analysts apparently share similar views on what they think the business is worth.

Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. We would highlight that Nomad Foods' revenue growth is expected to slow, with the forecast 3.6% annualised growth rate until the end of 2024 being well below the historical 6.8% p.a. growth over the last five years. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 2.6% per year. Even after the forecast slowdown in growth, it seems obvious that Nomad Foods is also expected to grow faster 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. Happily, there were no major changes to revenue forecasts, with the business still expected to grow faster 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.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have forecasts for Nomad Foods 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 Nomad Foods , and understanding these should be part of your investment process.

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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.