Earnings Update: Bunzl plc (LON:BNZL) Just Reported Its Annual Results And Analysts Are Updating Their Forecasts
Shareholders might have noticed that Bunzl plc (LON:BNZL) filed its yearly result this time last week. The early response was not positive, with shares down 3.4% to UK£31.35 in the past week. The result was positive overall - although revenues of UK£12b were in line with what the analysts predicted, Bunzl surprised by delivering a statutory profit of UK£1.56 per share, modestly greater than expected. 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. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Bunzl after the latest results.
See our latest analysis for Bunzl
Following last week's earnings report, Bunzl's 15 analysts are forecasting 2024 revenues to be UK£11.9b, approximately in line with the last 12 months. Statutory per-share earnings are expected to be UK£1.55, roughly flat on the last 12 months. In the lead-up to this report, the analysts had been modelling revenues of UK£12.0b and earnings per share (EPS) of UK£1.54 in 2024. 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.
It will come as no surprise then, to learn that the consensus price target is largely unchanged at UK£31.05. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. There are some variant perceptions on Bunzl, with the most bullish analyst valuing it at UK£37.00 and the most bearish at UK£25.00 per share. 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 Bunzl's revenue growth will slow down substantially, with revenues to the end of 2024 expected to display 1.2% growth on an annualised basis. This is compared to a historical growth rate of 6.6% over the past five years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 2.5% annually. So it's pretty clear that, while revenue growth is expected to slow down, the wider industry is also expected to grow faster than Bunzl.
The Bottom Line
The most obvious conclusion is that there's been no major change in the business' prospects in recent times, with the analysts holding their earnings forecasts steady, in line with previous estimates. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting that it's tracking in line with expectations. Although our data does suggest that Bunzl's revenue is expected to perform worse than 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 in mind, we wouldn't be too quick to come to a conclusion on Bunzl. Long-term earnings power is much more important than next year's profits. We have forecasts for Bunzl going out to 2026, and you can see them free on our platform here.
You can also view our analysis of Bunzl's balance sheet, and whether we think Bunzl is carrying too much debt, for free on our platform here.
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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.
