Yahoo Finance Results: Turning Point Brands, Inc. Exceeded Expectations And The Consensus Has Updated Its Estimates
A week ago, Turning Point Brands, Inc. (NYSE:TPB) came out with a strong set of quarterly numbers that could potentially lead to a re-rate of the stock. Turning Point Brands delivered a significant beat to revenue and earnings per share (EPS) expectations, with sales hitting US$104m, some 14% above indicated. Statutory EPS were US$0.40, an impressive 54% ahead of forecasts. 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. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.
Check out our latest analysis for Turning Point Brands
Taking into account the latest results, the consensus forecast from Turning Point Brands' four analysts is for revenues of US$410.2m in 2021, which would reflect a satisfactory 7.9% improvement in sales compared to the last 12 months. Per-share earnings are expected to jump 472% to US$2.35. In the lead-up to this report, the analysts had been modelling revenues of US$386.7m and earnings per share (EPS) of US$2.08 in 2021. There's been a pretty noticeable increase in sentiment, with the analysts upgrading revenues and making a nice increase in earnings per share in particular.
It will come as no surprise to learn that the analysts have increased their price target for Turning Point Brands 12% to US$46.00on the back of these upgrades. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. The most optimistic Turning Point Brands analyst has a price target of US$60.00 per share, while the most pessimistic values it at US$38.00. 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.
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 Turning Point Brands' revenue growth will slow down substantially, with revenues next year expected to grow 7.9%, compared to a historical growth rate of 16% over the past five years. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 7.5% next year. Factoring in the forecast slowdown in growth, it looks like Turning Point Brands is forecast to grow at about the same rate as the wider industry.
The Bottom Line
The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around Turning Point Brands' earnings potential next year. They also upgraded their revenue forecasts, although the latest estimates suggest that Turning Point Brands will grow in line with the overall industry. There was also a nice increase in the price target, with the analysts clearly feeling that the intrinsic value of the business is improving.
With that in mind, we wouldn't be too quick to come to a conclusion on Turning Point Brands. Long-term earnings power is much more important than next year's profits. We have estimates - from multiple Turning Point Brands analysts - going out to 2022, and you can see them free on our platform here.
It is also worth noting that we have found 4 warning signs for Turning Point Brands (1 is potentially serious!) 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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