Yahoo Finance Newell Brands Inc. Just Beat EPS By 154%: Here's What Analysts Think Will Happen Next
Newell Brands Inc. (NASDAQ:NWL) defied analyst predictions to release its quarterly results, which were ahead of market expectations. The company beat both earnings and revenue forecasts, with revenue of US$2.4b, some 4.8% above estimates, and statutory earnings per share (EPS) coming in at US$0.55, 154% ahead of expectations. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.
Check out our latest analysis for Newell Brands
Following the recent earnings report, the consensus from ten analysts covering Newell Brands is for revenues of US$10.2b in 2022, implying a perceptible 4.8% decline in sales compared to the last 12 months. Statutory earnings per share are predicted to grow 14% to US$1.98. Before this earnings report, the analysts had been forecasting revenues of US$10.1b and earnings per share (EPS) of US$1.69 in 2022. There was no real change to the revenue estimates, but the analysts do seem more bullish on earnings, given the nice gain to earnings per share expectations following these results.
There's been no major changes to the consensus price target of US$28.00, suggesting that the improved earnings per share outlook is not enough to have a long-term positive impact on the stock's valuation. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. Currently, the most bullish analyst values Newell Brands at US$38.00 per share, while the most bearish prices it at US$23.00. 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.
Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. One more thing stood out to us about these estimates, and it's the idea that Newell Brands' decline is expected to accelerate, with revenues forecast to fall at an annualised rate of 6.4% to the end of 2022. This tops off a historical decline of 3.4% a year 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 revenue grow 6.7% per year. So while a broad number of companies are forecast to grow, unfortunately Newell Brands is expected to see its sales affected worse than other companies in the industry.
The Bottom Line
The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around Newell Brands' earnings potential next year. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting sales are tracking in line with expectations - although our data does suggest that Newell Brands' revenues are expected to perform worse than the wider industry. The consensus price target held steady at US$28.00, with the latest estimates not enough to have an impact on their price targets.
Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have forecasts for Newell Brands going out to 2024, and you can see them free on our platform here.
Don't forget that there may still be risks. For instance, we've identified 2 warning signs for Newell Brands (1 is significant) you should be aware of.
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.
