Yahoo Finance BellRing Brands, Inc. Just Beat EPS By 27%: Here's What Analysts Think Will Happen Next
As you might know, BellRing Brands, Inc. (NYSE:BRBR) just kicked off its latest quarterly results with some very strong numbers. The company beat both earnings and revenue forecasts, with revenue of US$258m, some 9.8% above estimates, and statutory earnings per share (EPS) coming in at US$0.11, 27% ahead of expectations. 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 BellRing Brands after the latest results.
View our latest analysis for BellRing Brands
Taking into account the latest results, the consensus forecast from BellRing Brands' ten analysts is for revenues of US$1.02b in 2020, which would reflect a modest 6.8% improvement in sales compared to the last 12 months. Statutory earnings per share are expected to nosedive 82% to US$0.61 in the same period. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$1.02b and earnings per share (EPS) of US$0.63 in 2020. So it looks like there's been a small decline in overall sentiment after the recent results - there's been no major change to revenue estimates, but the analysts did make a small dip in their earnings per share forecasts.
It might be a surprise to learn that the consensus price target was broadly unchanged at US$22.13, with the analysts clearly implying that the forecast decline in earnings is not expected to have much of an impact on valuation. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. The most optimistic BellRing Brands analyst has a price target of US$26.00 per share, while the most pessimistic values it at US$16.00. As you can see, analysts are not all in agreement on the stock's future, but the range of estimates is still reasonably narrow, which could suggest that the outcome is not totally unpredictable.
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. We would highlight that BellRing Brands' revenue growth is expected to slow, with forecast 6.8% increase next year well below the historical 12% growth over the last year. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 6.4% next year. Factoring in the forecast slowdown in growth, it looks like BellRing Brands is forecast 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 BellRing Brands. Happily, there were no real changes to sales forecasts, with the business still expected to grow in line with the overall industry. The consensus price target held steady at US$22.13, with the latest estimates not enough to have an impact on their price targets.
Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. At Simply Wall St, we have a full range of analyst estimates for BellRing Brands going out to 2024, and you can see them free on our platform here..
And what about risks? Every company has them, and we've spotted 2 warning signs for BellRing Brands you should know about.
If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned.
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