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Helen of Troy Limited Just Beat Analyst Forecasts, And Analysts Have Been Updating Their Predictions

Simply Wall St
·4 mins read

As you might know, Helen of Troy Limited (NASDAQ:HELE) just kicked off its latest quarterly results with some very strong numbers. Statutory revenue and earnings both blasted past expectations, with revenue of US$531m beating expectations by 21% and earnings per share (EPS) reaching US$3.43, some 73% ahead of expectations. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

View our latest analysis for Helen of Troy

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After the latest results, the five analysts covering Helen of Troy are now predicting revenues of US$1.94b in 2021. If met, this would reflect a credible 3.9% improvement in sales compared to the last 12 months. Per-share earnings are expected to swell 16% to US$9.84. In the lead-up to this report, the analysts had been modelling revenues of US$1.82b and earnings per share (EPS) of US$8.57 in 2021. So it seems there's been a definite increase in optimism about Helen of Troy's future following the latest results, with a solid gain to the earnings per share forecasts in particular.

Althoughthe analysts have upgraded their earnings estimates, there was no change to the consensus price target of US$237, suggesting that the forecast performance does not have a long term impact on the company's valuation. 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. The most optimistic Helen of Troy analyst has a price target of US$246 per share, while the most pessimistic values it at US$224. Still, with such a tight range of estimates, it suggeststhe analysts have a pretty good idea of what they think the company is worth.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Helen of Troy's past performance and to peers in the same industry. We can infer from the latest estimates that forecasts expect a continuation of Helen of Troy'shistorical trends, as next year's 3.9% revenue growth is roughly in line with 3.7% 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 9.4% per year. So it's pretty clear that Helen of Troy is expected to grow slower than similar companies in the same 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 Helen of Troy following these results. Fortunately, they also upgraded their revenue estimates, although our data indicates sales are expected to perform worse than the wider industry. The consensus price target held steady at US$237, with the latest estimates not enough to have an impact on their price targets.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have forecasts for Helen of Troy going out to 2023, and you can see them free on our platform here.

Before you take the next step you should know about the 1 warning sign for Helen of Troy that we have uncovered.

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.