It's been a good week for Carnival Corporation & Plc (NYSE:CCL) shareholders, because the company has just released its latest annual results, and the shares gained 9.1% to US$51.26. The result was positive overall - although revenues of US$21b were in line with what analysts predicted, Carnival Corporation & surprised by delivering a statutory profit of US$4.32 per share, modestly greater than expected. Analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. We thought readers would find it interesting to see analysts' latest (statutory) post-earnings forecasts for next year.
Following the latest results, Carnival Corporation &'s 19 analysts are now forecasting revenues of US$21.7b in 2020. This would be a credible 4.3% improvement in sales compared to the last 12 months. Statutory earnings per share are expected to increase 3.6% to US$4.49. Yet prior to the latest earnings, analysts had been forecasting revenues of US$21.7b and earnings per share (EPS) of US$4.43 in 2020. So it's pretty clear that, although analysts have updated their estimates, there's been no major change in expectations for the business following the latest results.
Analysts reconfirmed their price target of US$50.37, showing that the business is executing well and in line with expectations. 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 Carnival Corporation &, with the most bullish analyst valuing it at US$59.00 and the most bearish at US$38.00 per share. There are definitely some different views on the stock, but the range of estimates is not wide enough as to imply that the situation is unforecastable, in our view.
In addition, we can look to Carnival Corporation &'s past performance and see whether business is expected to improve, and if the company is expected to perform better than wider market. We would highlight that Carnival Corporation &'s revenue growth is expected to slow, with forecast 4.3% increase next year well below the historical 6.0%p.a. growth over the last five years. Compare this against other companies (with analyst forecasts) in the market, which are in aggregate expected to see revenue growth of 7.4% next year. Factoring in the forecast slowdown in growth, it seems obvious that analysts still expect Carnival Corporation & to grow slower than the wider market.
The Bottom Line
The most obvious conclusion from these results is that there's been no major change in the business' prospects in recent times, with analysts holding earnings per share steady, in line with previous estimates. 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 US$50.37, 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 Carnival Corporation & going out to 2023, and you can see them free on our platform here.
You can also see whether Carnival Corporation & is carrying too much debt, and whether its balance sheet is healthy, for free on our platform here.
If you spot an error that warrants correction, please contact the editor at email@example.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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