Koninklijke Ahold Delhaize N.V. (AMS:AD) shares fell 9.4% to €21.18 in the week since its latest annual results. It was a credible result overall, with revenues of €66b and statutory earnings per share of €1.59 both in line with analyst estimates, showing that Koninklijke Ahold Delhaize is executing in line with expectations. 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. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether analysts have changed their mind on Koninklijke Ahold Delhaize after the latest results.
After the latest results, the 19 analysts covering Koninklijke Ahold Delhaize are now predicting revenues of €68.3b in 2020. If met, this would reflect a credible 3.0% improvement in sales compared to the last 12 months. Statutory earnings per share are expected to increase 6.3% to €1.70. In the lead-up to this report, analysts had been modelling revenues of €68.3b and earnings per share (EPS) of €1.70 in 2020. So it's pretty clear that, although analysts have updated their estimates, there's been no major change in expectations for the business following the latest results.
It will come as no surprise then, to learn that the consensus price target is largely unchanged at €23.08. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. The most optimistic Koninklijke Ahold Delhaize analyst has a price target of €26.57 per share, while the most pessimistic values it at €18.80. These price targets show that analysts do have some differing views on the business, but the estimates do not vary enough to suggest to us that some are betting on wild success or utter failure.
Another way to assess these estimates is by comparing them to past performance, and seeing whether analysts are more or less bullish relative to other companies in the market. It's pretty clear that analysts expect Koninklijke Ahold Delhaize's revenue growth will slow down substantially, with revenues next year expected to grow 3.0%, compared to a historical growth rate of 15% over the past five years. Compare this to the other companies in this market with analyst coverage, which are forecast to grow their revenue at 3.3% per year. So it's pretty clear that, while Koninklijke Ahold Delhaize's revenue growth is expected to slow, it's expected to grow roughly in line with the industry.
The Bottom Line
The most important thing to take away is that there's been no major change in sentiment, with analysts reconfirming that earnings per share are expected to continue performing in line with their prior expectations. Happily, there were no real changes to sales forecasts, with the business still expected to grow in line with the overall market. The consensus price target held steady at €23.08, with the latest estimates not enough to have an impact on analysts' estimated valuations.
Even so, the longer term trajectory of the business is much more important for the value creation of shareholders. At Simply Wall St, we have a full range of analyst estimates for Koninklijke Ahold Delhaize going out to 2023, and you can see them free on our platform here..
It might also be worth considering whether Koninklijke Ahold Delhaize's debt load is appropriate, using our debt analysis tools on the Simply Wall St platform, here.
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