Graphic Packaging Holding Company (NYSE:GPK) shares fell 3.7% to US$15.82 in the week since its latest yearly results. It was not a great result overall. While revenues of US$6.2b were in line with analyst predictions, earnings were less than expected, missing statutory estimates by 14% to hit US$0.70 per share. Following the result, analysts have 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. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether analysts have changed their mind on Graphic Packaging Holding after the latest results.
View our latest analysis for Graphic Packaging Holding
Following the latest results, Graphic Packaging Holding's eleven analysts are now forecasting revenues of US$6.36b in 2020. This would be a modest 3.3% improvement in sales compared to the last 12 months. Statutory earnings per share are expected to jump 40% to US$0.98. In the lead-up to this report, analysts had been modelling revenues of US$6.38b and earnings per share (EPS) of US$0.97 in 2020. So it's pretty clear that, although analysts have updated their estimates, there's been no major change in expectations for the business following the latest results.
Analysts reconfirmed their price target of US$18.14, showing that the business is executing well and in line with expectations. The consensus price target just an average of individual analyst targets, so - considering that the price target changed, it would be handy to see how wide the range of underlying estimates is. There are some variant perceptions on Graphic Packaging Holding, with the most bullish analyst valuing it at US$19.00 and the most bearish at US$17.00 per share. Still, with such a tight range of estimates, it suggests analysts have a pretty good idea of what they think the company is worth.
In addition, we can look to Graphic Packaging Holding's past performance and see whether business is expected to improve, and if the company is expected to perform better than wider market. It's pretty clear that analysts expect Graphic Packaging Holding's revenue growth will slow down substantially, with revenues next year expected to grow 3.3%, compared to a historical growth rate of 9.7% over the past five years. Compare this to the other companies in this market with analyst coverage, which are forecast to grow their revenue at 2.8% per year. Factoring in the forecast slowdown in growth, it looks like analysts are expecting Graphic Packaging Holding to grow at about the same rate as the wider market.
The Bottom Line
The most important thing to take away is that there's been no major change in sentiment, with analysts reconfirming that earnings per share are expected to continue performing in line with their prior expectations. Happily, there were no real changes to sales forecasts, with the business still expected to grow in line with the overall market. The consensus price target held steady at US$18.14, with the latest estimates not enough to have an impact on analysts' estimated valuations.
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 Graphic Packaging Holding analysts - going out to 2022, and you can see them free on our platform here.
It might also be worth considering whether Graphic Packaging Holding's debt load is appropriate, using our debt analysis tools on the Simply Wall St platform, here.
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.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Thank you for reading.
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Graphic Packaging Holding Company Just Missed EPS By 14%: Here's What Analysts Think Will Happen Next - Yahoo Finance
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