Investors in Pactiv Evergreen Inc. (NASDAQ:PTVE) had a good week, as its shares rose 3.5% to close at US$12.18 following the release of its third-quarter results. Revenues fell 3.0% short of expectations, at US$1.3b. Earnings correspondingly dipped, with Pactiv Evergreen reporting a statutory loss of US$1.18 per share, whereas the analysts had previously modelled a profit in this period. 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. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.

Taking into account the latest results, the consensus forecast from Pactiv Evergreen's six analysts is for revenues of US$5.30b in 2025. This reflects an okay 2.1% improvement in revenue compared to the last 12 months. Pactiv Evergreen is also expected to turn profitable, with statutory earnings of US$1.08 per share. In the lead-up to this report, the analysts had been modelling revenues of US$5.24b and earnings per share (EPS) of US$1.18 in 2025. The analysts seem to have become a little more negative on the business after the latest results, given the small dip in their earnings per share numbers for next year.

The consensus price target held steady at US$14.50, with the analysts seemingly voting that their lower forecast earnings are not expected to lead to a lower stock price in the foreseeable future. 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. Currently, the most bullish analyst values Pactiv Evergreen at US$17.00 per share, while the most bearish prices it at US$12.00. This shows there is still a bit of diversity in estimates, but analysts don't appear to be totally split on the stock as though it might be a success or failure situation.

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. It's pretty clear that there is an expectation that Pactiv Evergreen's revenue growth will slow down substantially, with revenues to the end of 2025 expected to display 1.6% growth on an annualised basis. This is compared to a historical growth rate of 4.8% over the past five years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 4.8% annually. Factoring in the forecast slowdown in growth, it seems obvious that Pactiv Evergreen is also expected to grow slower than other industry participants.

The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Pactiv Evergreen. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting that it's tracking in line with expectations. Although our data does suggest that Pactiv Evergreen's revenue is expected to perform worse 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.

With that in mind, we wouldn't be too quick to come to a conclusion on Pactiv Evergreen. Long-term earnings power is much more important than next year's profits. We have forecasts for Pactiv Evergreen going out to 2026, and you can see them free on our platform here.

Plus, you should also learn about the 1 warning sign we've spotted with Pactiv Evergreen .

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.