Analysts Are Updating Their Omnicom Group Inc. (NYSE:OMC) Estimates After Its Yearly Results

Shareholders might have noticed that Omnicom Group Inc. (NYSE:OMC) filed its annual result this time last week. The early response was not positive, with shares down 2.9% to US$84.23 in the past week. It looks like the results were a bit of a negative overall. While revenues of US$16b were in line with analyst predictions, statutory earnings were less than expected, missing estimates by 2.7% to hit US$7.46 per share. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Omnicom Group after the latest results.

View our latest analysis for Omnicom Group

After the latest results, the eleven analysts covering Omnicom Group are now predicting revenues of US$16.2b in 2025. If met, this would reflect a modest 3.0% improvement in revenue compared to the last 12 months. Per-share earnings are expected to accumulate 8.4% to US$8.17. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$16.3b and earnings per share (EPS) of US$8.34 in 2025. The analysts seem to have become a little more negative on the business after the latest results, given the small dip in their earnings per share numbers for next year.

The consensus price target held steady at US$112, with the analysts seemingly voting that their lower forecast earnings are not expected to lead to a lower stock price in the foreseeable future. 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. Currently, the most bullish analyst values Omnicom Group at US$121 per share, while the most bearish prices it at US$83.00. These price targets show that analysts do have some differing views on the business, but the estimates do not vary enough to suggest to us that some are betting on wild success or utter failure.

Of course, another way to look at these forecasts is to place them into context against the industry itself. It's clear from the latest estimates that Omnicom Group's rate of growth is expected to accelerate meaningfully, with the forecast 3.0% annualised revenue growth to the end of 2025 noticeably faster than its historical growth of 1.7% p.a. over the past five years. Other similar companies in the industry (with analyst coverage) are also forecast to grow their revenue at 3.6% per year. Factoring in the forecast acceleration in revenue, it's pretty clear that Omnicom Group is expected to grow at about the same rate as 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 Omnicom Group. They also reconfirmed their revenue estimates, with the company predicted to grow at about the same rate as 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 estimates - from multiple Omnicom Group analysts - going out to 2027, and you can see them free on our platform here.

You can also view our analysis of Omnicom Group's balance sheet, and whether we think Omnicom Group is carrying too much debt, for free on our platform here.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.