Pactiv Evergreen Inc. Just Beat Earnings Expectations: Here's What Analysts Think Will Happen Next

It's been a sad week for Pactiv Evergreen Inc. (NASDAQ:PTVE), who've watched their investment drop 12% to US$13.57 in the week since the company reported its first-quarter result. It looks to have been a decent result overall - while revenue fell marginally short of analyst estimates at US$1.3b, statutory earnings beat expectations by a notable 37%, coming in at US$0.04 per share. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.

View our latest analysis for Pactiv Evergreen

Following last week's earnings report, Pactiv Evergreen's seven analysts are forecasting 2024 revenues to be US$5.27b, approximately in line with the last 12 months. Earnings are expected to improve, with Pactiv Evergreen forecast to report a statutory profit of US$1.10 per share. Before this earnings report, the analysts had been forecasting revenues of US$5.42b and earnings per share (EPS) of US$1.09 in 2024. So it looks like the analysts have become a bit less optimistic after the latest results announcement, with revenues expected to fall even as the company is supposed to maintain EPS.

The consensus has reconfirmed its price target of US$16.57, showing that the analysts don't expect weaker revenue expectations next year to have a material impact on Pactiv Evergreen's market 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. There are some variant perceptions on Pactiv Evergreen, with the most bullish analyst valuing it at US$19.00 and the most bearish at US$14.00 per share. 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.

Of course, another way to look at these forecasts is to place them into context against the industry itself. We would highlight that revenue is expected to reverse, with a forecast 1.5% annualised decline to the end of 2024. That is a notable change from historical growth of 1.2% over the last five years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 2.9% annually for the foreseeable future. It's pretty clear that Pactiv Evergreen's revenues are expected to perform substantially worse 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. Unfortunately, they also downgraded their revenue estimates, and our data indicates underperformance compared to the wider industry. Even so, earnings per share are more important to the intrinsic value of the business. Even so, earnings per share are more important to the intrinsic value of the business. 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 Pactiv Evergreen 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 1 warning sign with Pactiv Evergreen , and understanding it 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.