Yahoo Finance Omnicom Group Inc. Just Beat Analyst Forecasts, And Analysts Have Been Updating Their Predictions
The quarterly results for Omnicom Group Inc. (NYSE:OMC) were released last week, making it a good time to revisit its performance. Omnicom Group reported US$3.6b in revenue, roughly in line with analyst forecasts, although statutory earnings per share (EPS) of US$1.59 beat expectations, being 6.1% higher than what the analysts expected. The 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've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.
View our latest analysis for Omnicom Group
Taking into account the latest results, the current consensus from Omnicom Group's eleven analysts is for revenues of US$15.7b in 2024. This would reflect a reasonable 5.3% increase on its revenue over the past 12 months. Per-share earnings are expected to rise 2.0% to US$7.72. Before this earnings report, the analysts had been forecasting revenues of US$15.6b and earnings per share (EPS) of US$7.57 in 2024. The analysts seems to have become more bullish on the business, judging by their new earnings per share estimates.
The consensus price target was unchanged at US$107, implying that the improved earnings outlook is not expected to have a long term impact on value creation for shareholders. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. Currently, the most bullish analyst values Omnicom Group at US$117 per share, while the most bearish prices it at US$88.00. This is a very narrow spread of estimates, implying either that Omnicom Group is an easy company to value, or - more likely - the analysts are relying heavily on some key assumptions.
Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. For example, we noticed that Omnicom Group's rate of growth is expected to accelerate meaningfully, with revenues forecast to exhibit 7.1% growth to the end of 2024 on an annualised basis. That is well above its historical decline of 0.2% a year over the past five years. Compare this against analyst estimates for the broader industry, which suggest that (in aggregate) industry revenues are expected to grow 3.1% annually. So it looks like Omnicom Group is expected to grow faster than its competitors, at least for a while.
The Bottom Line
The most important thing here is that the analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards Omnicom Group following these results. Fortunately, they also reconfirmed their revenue numbers, suggesting that it's tracking in line with expectations. Additionally, our data suggests that revenue is expected to grow faster 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 Omnicom Group. Long-term earnings power is much more important than next year's profits. We have estimates - from multiple Omnicom Group analysts - going out to 2026, and you can see them free on our platform here.
And what about risks? Every company has them, and we've spotted 1 warning sign for Omnicom Group you should know about.
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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.
