Yahoo Finance US Foods Holding Corp. Just Missed Earnings - But Analysts Have Updated Their Models
Investors in US Foods Holding Corp. (NYSE:USFD) had a good week, as its shares rose 6.6% to close at US$54.81 following the release of its first-quarter results. It looks like a pretty bad result, all things considered. Although revenues of US$8.9b were in line with analyst predictions, statutory earnings fell badly short, missing estimates by 23% to hit US$0.33 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.
See our latest analysis for US Foods Holding
Taking into account the latest results, the consensus forecast from US Foods Holding's 13 analysts is for revenues of US$37.9b in 2024. This reflects a reasonable 5.2% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to leap 20% to US$2.48. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$37.8b and earnings per share (EPS) of US$2.64 in 2024. 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.
Althoughthe analysts have revised their earnings forecasts for next year, they've also lifted the consensus price target 5.6% to US$61.78, suggesting the revised estimates are not indicative of a weaker long-term future for the business. 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. Currently, the most bullish analyst values US Foods Holding at US$72.00 per share, while the most bearish prices it at US$51.73. 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.
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. It's pretty clear that there is an expectation that US Foods Holding's revenue growth will slow down substantially, with revenues to the end of 2024 expected to display 6.9% growth on an annualised basis. This is compared to a historical growth rate of 9.7% over the past five years. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 4.6% per year. Even after the forecast slowdown in growth, it seems obvious that US Foods Holding is also expected to grow faster than the wider industry.
The Bottom Line
The most important thing to take away is that the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. Happily, there were no major changes to revenue forecasts, with the business still expected to grow faster than the wider industry. We note an upgrade to the price target, suggesting that the analysts believes the intrinsic value of the business is likely to improve over time.
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. We have forecasts for US Foods Holding going out to 2026, and you can see them free on our platform here.
It is also worth noting that we have found 2 warning signs for US Foods Holding that you need to take into consideration.
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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.
