Delta Apparel, Inc. (NYSEMKT:DLA) came out with its full-year results last week, and we wanted to see how the business is performing and what top analysts think of the company following this report. Delta Apparel reported US$432m in revenue, roughly in line with analyst forecasts, although earnings per share (EPS) of US$1.17 beat expectations, being 2.6% higher than what analysts expected. 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. So we collected the latest post-earnings consensus estimates to see what could be in store for next year.
Taking into account the latest results, the current consensus from Delta Apparel's lone analyst is for revenues of US$459.1m in 2020, which would reflect a satisfactory 6.3% increase on its sales over the past 12 months. Earnings per share are expected to bounce 47% to US$1.75. Yet prior to the latest earnings, analysts had been forecasting revenues of US$452.6m and earnings per share (EPS) of US$1.55 in 2020. There was no real change to the revenue estimates, but analysts do seem more bullish on earnings, given the nice gain to earnings per share expectations following these results.
Analysts have been lifting their price targets on the back of the earnings upgrade, with the consensus price target rising 16% to US$29.00.
It can also be useful to step back and take a broader view of how analyst forecasts compare to Delta Apparel's performance in recent years. For example, we noticed that Delta Apparel's rate of growth is expected to accelerate meaningfully, with revenues forecast to grow at 6.3%, well above its historical decline of 2.5% a year over the past five years. Compare this against analyst estimates for the wider market, which suggest that (in aggregate) market revenues are expected to grow 7.0% next year. So it looks like Delta Apparel is expected to grow at about the same rate as the wider market.
The Bottom Line
The most important thing to take away from this is that analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards Delta Apparel following these results. Happily, there were no real changes to sales forecasts, with the business still expected to grow in line with the overall market. There was also a nice increase in the price target, with analysts feeling that the intrinsic value of the business is improving.
Still, the long-term prospects of the business are much more relevant than next year's earnings. At least one analyst has provided forecasts out to 2021, which can be seen for free on our platform here.
It might also be worth considering whether Delta Apparel's debt load is appropriate, using our debt analysis tools on the Simply Wall St platform, here.
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