The first-quarter 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. 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. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.
After the latest results, the eleven analysts covering Omnicom Group are now predicting revenues of US$15.7b in 2024. If met, this would reflect a modest 5.3% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to accumulate 2.1% to US$7.67. In the lead-up to this report, the analysts had been modelling revenues of US$15.6b and earnings per share (EPS) of US$7.57 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.
It will come as no surprise then, to learn that the consensus price target is largely unchanged at US$107. 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 Omnicom Group, with the most bullish analyst valuing it at US$117 and the most bearish at US$88.00 per share. 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.
Of course, another way to look at these forecasts is to place them into context against the industry itself. 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. Not only are Omnicom Group's revenues expected to improve, it seems that the analysts are also expecting it to grow faster than the wider industry.
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. Happily, there were no major changes to revenue forecasts, with the business still expected to grow faster than the wider industry. The consensus price target held steady at US$107, with the latest estimates not enough to have an impact on their price targets.
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 Omnicom Group going out to 2026, and you can see them free on our platform here..
Before you take the next step you should know about the 1 warning sign for Omnicom Group that we have uncovered.
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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.