Investors in Flowers Foods, Inc. (NYSE:FLO) had a good week, as its shares rose 2.7% to close at US$23.02 following the release of its annual results. Revenues of US$5.1b were in line with forecasts, although statutory earnings per share (EPS) came in below expectations at US$0.58, missing estimates by 7.2%. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Flowers Foods after the latest results.
Following last week's earnings report, Flowers Foods' six analysts are forecasting 2024 revenues to be US$5.16b, approximately in line with the last 12 months. Per-share earnings are expected to leap 112% to US$1.25. In the lead-up to this report, the analysts had been modelling revenues of US$5.16b and earnings per share (EPS) of US$1.26 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 no major changes to earnings forecasts, the consensus price target fell 8.9% to US$24.00, suggesting that the analysts might have previously been hoping for an earnings upgrade. 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. There are some variant perceptions on Flowers Foods, with the most bullish analyst valuing it at US$30.00 and the most bearish at US$22.00 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.
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. We would highlight that Flowers Foods' revenue growth is expected to slow, with the forecast 1.4% annualised growth rate until the end of 2024 being well below the historical 4.9% p.a. growth over the last five years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 2.5% annually. Factoring in the forecast slowdown in growth, it seems obvious that Flowers Foods 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 Flowers Foods' revenue is expected to perform worse than the wider industry. The consensus price target fell measurably, with the analysts seemingly not reassured by the latest results, leading to a lower estimate of Flowers Foods' future valuation.
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. We have estimates - from multiple Flowers Foods analysts - going out to 2026, and you can see them free on our platform here.
You still need to take note of risks, for example - Flowers Foods has 4 warning signs we think you should be aware of.
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