Yahoo Finance Croda International Plc Just Reported Full-Year Earnings: Have Analysts Changed Their Mind On The Stock?
Last week, you might have seen that Croda International Plc (LON:CRDA) released its full-year result to the market. The early response was not positive, with shares down 3.0% to UK£42.06 in the past week. It was an okay report, and revenues came in at UK£1.4b, approximately in line with analyst estimates leading up to the results announcement. Following the result, 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. So we gathered the latest post-earnings forecasts to see what analysts' statutory forecasts suggest is in store for next year.
See our latest analysis for Croda International
Taking into account the latest results, Croda International's 17 analysts currently expect revenues in 2020 to be UK£1.36b, approximately in line with the last 12 months. Statutory earnings per share are expected to accumulate 6.7% to UK£1.84. Before this earnings report, analysts had been forecasting revenues of UK£1.36b and earnings per share (EPS) of UK£1.84 in 2020. The consensus analysts don't seem to have seen anything in these results that would have changed their view on the business, given there's been no major change to their estimates.
There were no changes to revenue or earnings estimates or the price target of UK£48.34, suggesting that the company has met expectations in its recent result. 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 Croda International, with the most bullish analyst valuing it at UK£55.20 and the most bearish at UK£41.00 per share. Still, with such a tight range of estimates, it suggests analysts have a pretty good idea of what they think the company is worth.
It can be useful to take a broader overview by seeing how analyst forecasts compare, both to the Croda International's past performance and to peers in the same market. These estimates imply that sales are expected to slow, with a forecast revenue decline of 1.3% a significant reduction from annual growth of 6.7% over the last five years. Compare this with our data, which suggests that other companies in the same market are, in aggregate, expected to see their revenue grow 2.4% next year. It's pretty clear that Croda International's revenues are expected to perform substantially worse than the wider market.
The Bottom Line
The most important thing to take away is that there's been no major change in sentiment, with analysts reconfirming that earnings per share are expected to continue performing in line with their prior expectations. On the plus side, there were no major changes to revenue estimates; although analyst forecasts imply revenues will perform worse than the wider market. The consensus price target held steady at UK£48.34, with the latest estimates not enough to have an impact on analysts' estimated valuations.
With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have forecasts for Croda International going out to 2024, and you can see them free on our platform here.
It might also be worth considering whether Croda International's debt load is appropriate, using our debt analysis tools on the Simply Wall St platform, here.
If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. 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. Simply Wall St has no position in the stocks mentioned.
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