Yahoo Finance Orora Limited Just Missed Earnings - But Analysts Have Updated Their Models
The analysts might have been a bit too bullish on Orora Limited (ASX:ORA), given that the company fell short of expectations when it released its half-year results last week. Results showed a clear earnings miss, with AU$2.0b revenue coming in 9.9% lower than what the analystsexpected. Statutory earnings per share (EPS) of AU$0.059 missed the mark badly, arriving some 41% below what was expected. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.
View our latest analysis for Orora
Taking into account the latest results, the most recent consensus for Orora from 13 analysts is for revenues of AU$4.79b in 2024. If met, it would imply a decent 15% increase on its revenue over the past 12 months. Statutory earnings per share are predicted to bounce 67% to AU$0.18. Yet prior to the latest earnings, the analysts had been anticipated revenues of AU$5.00b and earnings per share (EPS) of AU$0.20 in 2024. It's pretty clear that pessimism has reared its head after the latest results, leading to a weaker revenue outlook and a minor downgrade to earnings per share estimates.
Despite the cuts to forecast earnings, there was no real change to the AU$3.07 price target, showing that the analysts don't think the changes have a meaningful impact on its intrinsic value. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. There are some variant perceptions on Orora, with the most bullish analyst valuing it at AU$3.44 and the most bearish at AU$2.70 per share. 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 clear from the latest estimates that Orora's rate of growth is expected to accelerate meaningfully, with the forecast 32% annualised revenue growth to the end of 2024 noticeably faster than its historical growth of 4.2% p.a. over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 4.3% per year. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect Orora to grow faster than the wider industry.
The Bottom Line
The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Orora. Regrettably, they also downgraded their revenue estimates, but the latest forecasts still imply the business will grow faster than the wider industry. The consensus price target held steady at AU$3.07, with the latest estimates not enough to have an impact on their price targets.
With that in mind, we wouldn't be too quick to come to a conclusion on Orora. Long-term earnings power is much more important than next year's profits. We have forecasts for Orora going out to 2026, and you can see them free on our platform here.
We don't want to rain on the parade too much, but we did also find 4 warning signs for Orora (3 shouldn't be ignored!) that you need to be mindful of.
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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.
