Prestige Consumer Healthcare Inc. (NYSE:PBH) just released its second-quarter report and things are looking bullish. It was overall a positive result, with revenues beating expectations by 4.4% to hit US$237m. Prestige Consumer Healthcare also reported a statutory profit of US$0.88, which was an impressive 23% above what the analysts had forecast. 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. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.
Taking into account the latest results, the seven analysts covering Prestige Consumer Healthcare provided consensus estimates of US$929.8m revenue in 2021, which would reflect a small 3.1% decline on its sales over the past 12 months. Statutory per share are forecast to be US$3.22, approximately in line with the last 12 months. In the lead-up to this report, the analysts had been modelling revenues of US$940.3m and earnings per share (EPS) of US$3.17 in 2021. So it's pretty clear that, although the analysts have updated their estimates, there's been no major change in expectations for the business following the latest results.
There were no changes to revenue or earnings estimates or the price target of US$42.75, 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 Prestige Consumer Healthcare, with the most bullish analyst valuing it at US$48.00 and the most bearish at US$37.00 per share. Even so, with a relatively close grouping of estimates, it looks like the analysts are quite confident in their valuations, suggesting Prestige Consumer Healthcare is an easy business to forecast or the the analysts are all using similar assumptions.
Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. These estimates imply that sales are expected to slow, with a forecast revenue decline of 3.1%, a significant reduction from annual growth of 4.1% 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 6.7% annually for the foreseeable future. It's pretty clear that Prestige Consumer Healthcare's revenues are expected to perform substantially worse than the wider industry.
The Bottom Line
The most important thing to take away is that there's been no major change in sentiment, with the analysts reconfirming that the business is performing in line with their previous earnings per share estimates. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting sales are tracking in line with expectations - although our data does suggest that Prestige Consumer Healthcare's revenues are expected to perform worse than the wider industry. The consensus price target held steady at US$42.75, with the latest estimates not enough to have an impact on their price targets.
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 Simply Wall St, we have a full range of analyst estimates for Prestige Consumer Healthcare going out to 2023, and you can see them free on our platform here..
You still need to take note of risks, for example - Prestige Consumer Healthcare has 1 warning sign we think you should be aware of.
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