Glatfelter Corporation Just Missed EPS By 78%: Here's What Analysts Think Will Happen Next

It's been a mediocre week for Glatfelter Corporation (NYSE:GLT) shareholders, with the stock dropping 15% to US$14.54 in the week since its latest annual results. Statutory earnings per share fell badly short of expectations, coming in at US$0.15, some 78% below analyst forecasts, although revenues were okay, approximately in line with analyst estimates at US$1.1b. Following the result, the analyst has 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. So we gathered the latest post-earnings forecasts to see what estimate suggests is in store for next year.

See our latest analysis for Glatfelter

Taking into account the latest results, the consensus forecast from Glatfelter's one analyst is for revenues of US$1.56b in 2022, which would reflect a major 44% improvement in sales compared to the last 12 months. Per-share earnings are expected to surge 264% to US$0.55. In the lead-up to this report, the analyst had been modelling revenues of US$1.53b and earnings per share (EPS) of US$1.15 in 2022. The analyst seem to have become more bearish following the latest results. While there were no changes to revenue forecasts, there was a pretty serious reduction to EPS estimates.

It might be a surprise to learn that the consensus price target fell 5.3% to US$18.00, with the analyst clearly linking lower forecast earnings to the performance of the stock price.

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. One thing stands out from these estimates, which is that Glatfelter is forecast to grow faster in the future than it has in the past, with revenues expected to display 44% annualised growth until the end of 2022. If achieved, this would be a much better result than the 1.1% annual decline over the past five years. Compare this against analyst estimates for the broader industry, which suggest that (in aggregate) industry revenues are expected to decline 1.5% per year. So although Glatfelter is expected to return to growth, it's also expected to grow revenues during a time when the wider industry is estimated to see revenue decline.

The Bottom Line

The most important thing to take away is that the analyst downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. On the plus side, they made no changes to their revenue estimates - and they expect sales to perform better than the wider industry. The consensus price target fell measurably, with the analyst seemingly not reassured by the latest results, leading to a lower estimate of Glatfelter's future valuation.

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. At least one analyst has provided forecasts out to 2023, which can be seen for free on our platform here.

Even so, be aware that Glatfelter is showing 5 warning signs in our investment analysis , and 1 of those can't be ignored...

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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.