A week ago, B&G Foods, Inc. (NYSE:BGS) came out with a strong set of third-quarter numbers that could potentially lead to a re-rate of the stock. The company beat expectations with revenues of US$496m arriving 7.3% ahead of forecasts. Statutory earnings per share (EPS) were US$0.72, 9.4% ahead of estimates. 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. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.
Taking into account the latest results, the current consensus, from the six analysts covering B&G Foods, is for revenues of US$1.89b in 2021, which would reflect a discernible 2.0% reduction in B&G Foods' sales over the past 12 months. Statutory earnings per share are forecast to dip 3.4% to US$1.96 in the same period. In the lead-up to this report, the analysts had been modelling revenues of US$1.82b and earnings per share (EPS) of US$1.98 in 2021. There doesn't appear to have been a major change in sentiment following the results, other than the modest lift to revenue estimates.
Even though revenue forecasts increased, there was no change to the consensus price target of US$30.44, suggesting the analysts are focused on earnings as the driver of value creation. 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. Currently, the most bullish analyst values B&G Foods at US$32.00 per share, while the most bearish prices it at US$28.00. This is a very narrow spread of estimates, implying either that B&G Foods is an easy company to value, or - more likely - the analysts are relying heavily on some key assumptions.
Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. These estimates imply that sales are expected to slow, with a forecast revenue decline of 2.0%, a significant reduction from annual growth of 11% over the last five years. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 3.0% next year. It's pretty clear that B&G Foods' revenues are expected to perform substantially worse than the wider industry.
The Bottom Line
The most important thing to take away is that there's been no major change in sentiment, with the analysts reconfirming that the business is performing in line with their previous earnings per share estimates. Fortunately, they also upgraded their revenue estimates, although our data indicates sales are 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.
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 B&G Foods going out to 2023, and you can see them free on our platform here.
Plus, you should also learn about the 4 warning signs we've spotted with B&G Foods (including 3 which are potentially serious) .
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.
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