AptarGroup, Inc. Just Beat EPS By 12%: Here's What Analysts Think Will Happen Next
A week ago, AptarGroup, Inc. (NYSE:ATR) came out with a strong set of quarterly numbers that could potentially lead to a re-rate of the stock. AptarGroup beat earnings, with revenues hitting US$759m, ahead of expectations, and statutory earnings per share outperforming analyst reckonings by a solid 12%. Following the result, the 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 the analysts have changed their mind on AptarGroup after the latest results.
View our latest analysis for AptarGroup
Taking into account the latest results, the current consensus from AptarGroup's ten analysts is for revenues of US$3.06b in 2021, which would reflect a credible 7.4% increase on its sales over the past 12 months. Statutory earnings per share are predicted to surge 26% to US$4.12. Before this earnings report, the analysts had been forecasting revenues of US$3.03b and earnings per share (EPS) of US$4.03 in 2021. The analysts seems to have become more bullish on the business, judging by their new earnings per share estimates.
There's been no major changes to the consensus price target of US$125, suggesting that the improved earnings per share outlook is not enough to have a long-term positive impact on the stock's 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 AptarGroup analyst has a price target of US$135 per share, while the most pessimistic values it at US$96.00. Analysts definitely have varying views on the business, but the spread of estimates is not wide enough in our view to suggest that extreme outcomes could await AptarGroup shareholders.
One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. The analysts are definitely expecting AptarGroup's growth to accelerate, with the forecast 7.4% growth ranking favourably alongside historical growth of 5.4% per annum over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 4.4% per year. Factoring in the forecast acceleration in revenue, it's pretty clear that AptarGroup is expected to grow much faster than its industry.
The Bottom Line
The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around AptarGroup's earnings potential next year. Happily, there were no major changes to revenue forecasts, with the business still expected to grow faster than the wider industry. The consensus price target held steady at US$125, 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. We have forecasts for AptarGroup going out to 2024, and you can see them free on our platform here.
We don't want to rain on the parade too much, but we did also find 2 warning signs for AptarGroup that you need to be mindful of.
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. 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.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com.
