Last week saw the newest third-quarter earnings release from Jerónimo Martins, SGPS, S.A. (ELI:JMT), an important milestone in the company's journey to build a stronger business. Revenues were in line with forecasts, at €4.8b, although earnings per share came in 15% below what analysts expected, at €0.16 per share. This is an important time for investors, as they can track a company's performance in its report, look at what top analysts are forecasting for next year, and see if there has been any change to expectations for the business. So we gathered the latest post-earnings forecasts to see what analysts are forecasting for next year.
Taking into account the latest results, the latest consensus from Jerónimo Martins SGPS's 21 analysts is for revenues of €19.7b in 2020, which would reflect a notable 8.0% improvement in sales compared to the last 12 months. Earnings per share are expected to bounce 22% to €0.73. Yet prior to the latest earnings, analysts had been forecasting revenues of €19.7b and earnings per share (EPS) of €0.73 in 2020. The consensus analysts don't seem to have seen anything in these results that would have changed their view on the business, given there's been no major change to their estimates.
Analysts reconfirmed their price target of €15.51, showing that the business is executing well and in line with expectations. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. The most optimistic Jerónimo Martins SGPS analyst has a price target of €19.00 per share, while the most pessimistic values it at €9.50. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the business.
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. We can infer from the latest estimates that analysts are expecting a continuation of Jerónimo Martins SGPS's historical trends, as next year's forecast 8.0% revenue growth is roughly in line with 7.8% annual revenue growth over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenues grow 3.7% per year. So it's pretty clear that Jerónimo Martins SGPS is forecast to grow substantially faster than its market.
The Bottom Line
The most obvious conclusion from these results is that there's been no major change in the business' prospects in recent times, with analysts holding earnings per share steady, in line with previous estimates. Happily, there were no major changes to revenue forecasts, with analysts still expecting the business to grow faster than the wider market. 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.
Still, the long-term prospects of the business are much more relevant than next year's earnings. We have estimates - from multiple Jerónimo Martins SGPS analysts - going out to 2023, and you can see them free on our platform here.
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