It's been a pretty great week for The Boston Beer Company, Inc. (NYSE:SAM) shareholders, with its shares surging 15% to US$1,091 in the week since its latest quarterly results. Revenues of US$493m fell slightly short of expectations, but earnings were a definite bright spot, with statutory per-share profits of US$6.51 an impressive 37% 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. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.
Following the latest results, Boston Beer Company's eleven analysts are now forecasting revenues of US$2.37b in 2021. This would be a major 50% improvement in sales compared to the last 12 months. Per-share earnings are expected to jump 53% to US$21.78. Before this earnings report, the analysts had been forecasting revenues of US$2.19b and earnings per share (EPS) of US$17.52 in 2021. So it seems there's been a definite increase in optimism about Boston Beer Company's future following the latest results, with a very substantial lift in the earnings per share forecasts in particular.
With these upgrades, we're not surprised to see that the analysts have lifted their price target 17% to US$1,028per share. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. There are some variant perceptions on Boston Beer Company, with the most bullish analyst valuing it at US$1,354 and the most bearish at US$575 per share. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the business.
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. The analysts are definitely expecting Boston Beer Company's growth to accelerate, with the forecast 50% growth ranking favourably alongside historical growth of 9.8% per annum over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 6.6% next year. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect Boston Beer Company to grow faster than the wider industry.
The Bottom Line
The most important thing here is that the analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards Boston Beer Company following these results. Pleasantly, they also upgraded their revenue estimates, and their forecasts suggest the business is expected to grow faster than the wider industry. There was also a nice increase in the price target, with the analysts clearly feeling that the intrinsic value of the business is improving.
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 Boston Beer Company analysts - going out to 2022, and you can see them free on our platform here.
Plus, you should also learn about the 2 warning signs we've spotted with Boston Beer Company .
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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