Sonoco Products Company Just Missed EPS By 11%: Here's What Analysts Think Will Happen Next
Sonoco Products Company (NYSE:SON) came out with its full-year results last week, and we wanted to see how the business is performing and what top analysts think of the company following this report. Revenues were in line with forecasts, at US$5.4b, although statutory earnings per share came in 11% below what analysts expected, at US$2.88 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. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether analysts have changed their mind on Sonoco Products after the latest results.
Check out our latest analysis for Sonoco Products
Following last week's earnings report, Sonoco Products's nine analysts are forecasting 2020 revenues to be US$5.48b, approximately in line with the last 12 months. Statutory earnings per share are expected to leap 23% to US$3.56. Before this earnings report, analysts had been forecasting revenues of US$5.53b and earnings per share (EPS) of US$3.58 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.
Analysts reconfirmed their price target of US$59.60, showing that the business is executing well and in line with expectations. 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. Currently, the most bullish analyst values Sonoco Products at US$68.00 per share, while the most bearish prices it at US$42.00. As you can see, analysts are not all in agreement on the stock's future, but the range of estimates is still reasonably narrow, which could suggest that the outcome is not totally unpredictable.
It can also be useful to step back and take a broader view of how analyst forecasts compare to Sonoco Products's performance in recent years. Next year brings more of the same, according to analysts, with revenue forecast to grow 1.9%, in line with its 2.1% annual 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 2.5% per year. So it's pretty clear that Sonoco Products is expected to grow slower than similar companies in the same 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. Fortunately, analysts also reconfirmed their revenue estimates, suggesting sales are tracking in line with expectations - although our data does suggest that Sonoco Products's revenues are expected to perform worse 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.
With that in mind, we wouldn't be too quick to come to a conclusion on Sonoco Products. 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 Sonoco Products going out to 2021, and you can see them free on our platform here..
You can also see whether Sonoco Products is carrying too much debt, and whether its balance sheet is healthy, for free on our platform here.
If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. 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. Simply Wall St has no position in the stocks mentioned.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Thank you for reading.
