Investors in Silgan Holdings Inc. (NYSE:SLGN) had a good week, as its shares rose 3.3% to close at US$45.25 following the release of its yearly results. Silgan Holdings reported US$6.0b in revenue, roughly in line with analyst forecasts, although statutory earnings per share (EPS) of US$2.98 beat expectations, being 3.2% higher than what the analysts expected. Following the result, the 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. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Silgan Holdings after the latest results.
Taking into account the latest results, Silgan Holdings' eleven analysts currently expect revenues in 2024 to be US$6.09b, approximately in line with the last 12 months. Per-share earnings are expected to rise 6.0% to US$3.25. In the lead-up to this report, the analysts had been modelling revenues of US$6.11b and earnings per share (EPS) of US$3.29 in 2024. 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.
With the analysts reconfirming their revenue and earnings forecasts, it's surprising to see that the price target rose 6.1% to US$51.91. It looks as though they previously had some doubts over whether the business would live up to their expectations. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. Currently, the most bullish analyst values Silgan Holdings at US$62.00 per share, while the most bearish prices it at US$42.00. This shows there is still 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. It's pretty clear that there is an expectation that Silgan Holdings' revenue growth will slow down substantially, with revenues to the end of 2024 expected to display 1.7% growth on an annualised basis. This is compared to a historical growth rate of 8.7% over the past five years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 2.9% annually. Factoring in the forecast slowdown in growth, it seems obvious that Silgan Holdings is also expected to grow slower than other industry participants.
The Bottom Line
The most obvious conclusion is that there's been no major change in the business' prospects in recent times, with the analysts holding their earnings forecasts steady, in line with previous estimates. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting that it's tracking in line with expectations. Although our data does suggest that Silgan Holdings' revenue is expected to perform worse than the wider industry. There was also a nice increase in the price target, with the analysts clearly feeling that the intrinsic value of the business is improving.
Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. At Simply Wall St, we have a full range of analyst estimates for Silgan Holdings going out to 2026, and you can see them free on our platform here..
Don't forget that there may still be risks. For instance, we've identified 2 warning signs for Silgan Holdings (1 makes us a bit uncomfortable) you should be aware of.
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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.