Yahoo Finance L'Oréal S.A. Just Missed EPS By 11%: Here's What Analysts Think Will Happen Next
It's been a good week for L'Oréal S.A. (EPA:OR) shareholders, because the company has just released its latest yearly results, and the shares gained 7.5% to €271. It was not a great result overall. While revenues of €30b were in line with analyst predictions, earnings were less than expected, missing statutory estimates by 11% to hit €6.66 per share. Earnings are an important time for investors, as they can track a company's performance, look at what top analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. We thought readers would find it interesting to see analysts' latest (statutory) post-earnings forecasts for next year.
Check out our latest analysis for L'Oréal
After the latest results, the 19 analysts covering L'Oréal are now predicting revenues of €31.2b in 2020. If met, this would reflect a satisfactory 4.4% improvement in sales compared to the last 12 months. Statutory earnings per share are expected to leap 24% to €8.28. Before this earnings report, analysts had been forecasting revenues of €31.6b and earnings per share (EPS) of €8.40 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 €259, suggesting that the company has met expectations in its recent result. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. There are some variant perceptions on L'Oréal, with the most bullish analyst valuing it at €305 and the most bearish at €193 per share. These price targets show that analysts do have some differing views on the business, but the estimates do not vary enough to suggest to us that some are betting on wild success or utter failure.
Another way to assess these estimates is by comparing them to past performance, and seeing whether analysts are more or less bullish relative to other companies in the market. Next year brings more of the same, according to analysts, with revenue forecast to grow 4.4%, in line with its 4.3% annual growth over the past five years. Compare this with the wider market, which analyst estimates (in aggregate) suggest will see revenues grow 4.6% next year. It's clear that while L'Oréal's revenue growth is expected to continue on its current trajectory, it's only expected to grow in line with the market itself.
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. They also reconfirmed their revenue estimates, with the company predicted to grow at about the same rate as the wider market. 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 said, the long-term trajectory of the company's earnings is a lot more important than next year. We have forecasts for L'Oréal going out to 2024, and you can see them free on our platform here.
We also provide an overview of the L'Oréal Board and CEO remuneration and length of tenure at the company, and whether insiders have been buying the stock, 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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