As you might know, J & J Snack Foods Corp. (NASDAQ:JJSF) just kicked off its latest annual results with some very strong numbers. The company beat both earnings and revenue forecasts, with revenue of US$1.0b, some 2.5% above estimates, and statutory earnings per share (EPS) coming in at US$0.97, 51% ahead of expectations. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.
Following last week's earnings report, J & J Snack Foods' three analysts are forecasting 2021 revenues to be US$1.03b, approximately in line with the last 12 months. Statutory earnings per share are predicted to leap 206% to US$2.97. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$1.03b and earnings per share (EPS) of US$2.98 in 2021. 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.
The analysts reconfirmed their price target of US$127, 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. Currently, the most bullish analyst values J & J Snack Foods at US$140 per share, while the most bearish prices it at US$117. The narrow spread of estimates could suggest that the business' future is relatively easy to value, or thatthe analysts have a strong view on its prospects.
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. It's pretty clear that there is an expectation that J & J Snack Foods' revenue growth will slow down substantially, with revenues next year expected to grow 0.5%, compared to a historical growth rate of 3.6% over the past five years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 3.0% next year. So it's pretty clear that, while revenue growth is expected to slow down, the wider industry is also expected to grow faster than J & J Snack Foods.
The Bottom Line
The most important thing to take away is that there's been no major change in sentiment, with the analysts reconfirming that the business is performing in line with their previous earnings per share estimates. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting sales are tracking in line with expectations - although our data does suggest that J & J Snack Foods' revenues are expected to perform worse than the wider industry. The consensus price target held steady at US$127, with the latest estimates not enough to have an impact on their price targets.
Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. We have forecasts for J & J Snack Foods going out to 2022, and you can see them free on our platform here.
That said, it's still necessary to consider the ever-present spectre of investment risk. We've identified 4 warning signs with J & J Snack Foods , and understanding them should be part of your investment process.
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.
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