Omnicom Group Inc. (NYSE:OMC) Yearly Results: Here's What Analysts Are Forecasting For This Year
Omnicom Group Inc. (NYSE:OMC) shareholders are probably feeling a little disappointed, since its shares fell 3.7% to US$86.63 in the week after its latest full-year results. Omnicom Group reported in line with analyst predictions, delivering revenues of US$15b and statutory earnings per share of US$6.91, suggesting the business is executing well and in line with its plan. 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've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.
See our latest analysis for Omnicom Group
After the latest results, the eleven analysts covering Omnicom Group are now predicting revenues of US$15.6b in 2024. If met, this would reflect an okay 6.2% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to rise 8.6% to US$7.63. Before this earnings report, the analysts had been forecasting revenues of US$15.4b and earnings per share (EPS) of US$7.75 in 2024. So it's pretty clear that, although the 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 US$100. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. There are some variant perceptions on Omnicom Group, with the most bullish analyst valuing it at US$117 and the most bearish at US$79.00 per share. This shows there is still a bit of diversity in estimates, but analysts don't appear to be totally split on the stock as though it might be a success or failure situation.
Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. For example, we noticed that Omnicom Group's rate of growth is expected to accelerate meaningfully, with revenues forecast to exhibit 6.2% growth to the end of 2024 on an annualised basis. That is well above its historical decline of 0.8% a year over the past five years. Compare this against analyst estimates for the broader industry, which suggest that (in aggregate) industry revenues are expected to grow 3.3% annually. Not only are Omnicom Group's revenues expected to improve, it seems that the analysts are also expecting it to grow faster than the wider industry.
The Bottom Line
The most obvious conclusion is that there's been no major change in the business' prospects in recent times, with the analysts holding their earnings forecasts steady, in line with previous estimates. Happily, there were no major changes to revenue forecasts, with the business still expected to grow faster than the wider industry. The consensus price target held steady at US$100, with the latest estimates not enough to have an impact on their price targets.
With that in mind, we wouldn't be too quick to come to a conclusion on Omnicom Group. Long-term earnings power is much more important than next year's profits. At Simply Wall St, we have a full range of analyst estimates for Omnicom Group going out to 2026, and you can see them free on our platform here..
You can also see whether Omnicom Group is carrying too much debt, and whether its balance sheet is healthy, for free on our platform here.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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.
