Yahoo Finance Berry Global Group, Inc. Just Beat Analyst Forecasts, And Analysts Have Been Updating Their Predictions
Berry Global Group, Inc. (NYSE:BERY) came out with its full-year results last week, and we wanted to see how the business is performing and what industry forecasters think of the company following this report. The result was positive overall - although revenues of US$12b were in line with what the analysts predicted, Berry Global Group surprised by delivering a statutory profit of US$4.14 per share, modestly greater than expected. 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. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.
See our latest analysis for Berry Global Group
Taking into account the latest results, the consensus forecast from Berry Global Group's 13 analysts is for revenues of US$11.9b in 2021, which would reflect a reasonable 2.0% improvement in sales compared to the last 12 months. Per-share earnings are expected to leap 24% to US$5.21. In the lead-up to this report, the analysts had been modelling revenues of US$12.0b and earnings per share (EPS) of US$5.13 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 consensus price target rose 6.5% to US$66.73despite there being no meaningful change to earnings estimates. It could be that the analystsare reflecting the predictability of Berry Global Group's earnings by assigning a price premium. 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 Berry Global Group, with the most bullish analyst valuing it at US$76.00 and the most bearish at US$55.00 per share. There are definitely some different views on the stock, but the range of estimates is not wide enough as to imply that the situation is unforecastable, in our view.
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. We would highlight that Berry Global Group's revenue growth is expected to slow, with forecast 2.0% increase next year well below the historical 15%p.a. growth over the last five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 4.4% per 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 Berry Global Group.
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. On the plus side, there were no major changes to revenue estimates; although forecasts imply revenues will perform worse than the wider industry. We note an upgrade to the price target, suggesting that the analysts believes the intrinsic value of the business is likely to improve over time.
With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have estimates - from multiple Berry Global Group analysts - going out to 2025, and you can see them free on our platform here.
It is also worth noting that we have found 1 warning sign for Berry Global Group that you need to take into consideration.
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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