Yahoo Finance Monro, Inc. Just Missed EPS By 7.7%: Here's What Analysts Think Will Happen Next
Monro, Inc. (NASDAQ:MNRO) just released its latest quarterly report and things are not looking great. Monro missed analyst estimates, with revenues of US$329m and statutory earnings per share (EPS) of US$0.56, missing by 2.6% and 7.7% respectively. 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. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether analysts have changed their mind on Monro after the latest results.
View our latest analysis for Monro
Taking into account the latest results, the current consensus from Monro's eight analysts is for revenues of US$1.37b in 2021, which would reflect a notable 9.1% increase on its sales over the past 12 months. Statutory earnings per share are expected to swell 12% to US$2.64. In the lead-up to this report, analysts had been modelling revenues of US$1.40b and earnings per share (EPS) of US$2.91 in 2021. Analysts are less bullish than they were before these results, given the reduced revenue forecasts and the small dip in earnings per share expectations.
It'll come as no surprise then, to learn that analysts have cut their price target 11% to US$68.00. 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. Currently, the most bullish analyst values Monro at US$82.00 per share, while the most bearish prices it at US$56.00. This shows there is still quite 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.
One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. We can infer from the latest estimates that analysts are expecting a continuation of Monro's historical trends, as next year's forecast 9.1% revenue growth is roughly in line with 7.6% annual revenue growth over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenues grow 5.7% per year. So it's pretty clear that Monro is forecast to grow substantially faster than its market.
The Bottom Line
The most important thing to take away is that analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. Unfortunately analysts also downgraded their revenue estimates, although industry data suggests that Monro's revenues are expected to grow faster than the wider market. Analysts also downgraded their price target, suggesting that the latest news has led analysts to become more pessimistic about the intrinsic value of the business.
With that said, the long-term trajectory of the company's earnings is a lot more important than next year. At Simply Wall St, we have a full range of analyst estimates for Monro going out to 2022, and you can see them free on our platform here..
It might also be worth considering whether Monro'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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