BellRing Brands, Inc. (NYSE:BRBR) just released its latest quarterly results and things are looking bullish. It was overall a positive result, with revenues beating expectations by 5.9% to hit US$495m. BellRing Brands also reported a statutory profit of US$0.43, which was an impressive 30% above what the analysts had forecast. 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. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on BellRing Brands after the latest results.
Taking into account the latest results, the consensus forecast from BellRing Brands' 14 analysts is for revenues of US$1.96b in 2024. This reflects a modest 6.2% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to climb 20% to US$1.75. In the lead-up to this report, the analysts had been modelling revenues of US$1.92b and earnings per share (EPS) of US$1.58 in 2024. Although the revenue estimates have not really changed, we can see there's been a nice increase in earnings per share expectations, suggesting that the analysts have become more bullish after the latest result.
The consensus price target was unchanged at US$63.85, implying that the improved earnings outlook is not expected to have a long term impact on value creation for shareholders. 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 BellRing Brands, with the most bullish analyst valuing it at US$68.00 and the most bearish at US$50.00 per share. Still, with such a tight range of estimates, it suggeststhe analysts have a pretty good idea of what they think the company is worth.
Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. The period to the end of 2024 brings more of the same, according to the analysts, with revenue forecast to display 13% growth on an annualised basis. That is in line with its 16% annual growth over the past five years. Compare this with the broader industry, which analyst estimates (in aggregate) suggest will see revenues grow 6.8% annually. So it's pretty clear that BellRing Brands is forecast to grow substantially faster than its industry.
The Bottom Line
The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around BellRing Brands' earnings potential next year. Happily, there were no major changes to revenue forecasts, with the business still expected to grow faster than the wider industry. 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.
Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. We have forecasts for BellRing Brands going out to 2026, and you can see them free on our platform here.
Even so, be aware that BellRing Brands is showing 2 warning signs in our investment analysis , and 1 of those shouldn't be ignored...
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