Revenue Beat: Crown Holdings, Inc. Exceeded Revenue Forecasts By 7.4% And Analysts Are Updating Their Estimates
Investors in Crown Holdings, Inc. (NYSE:CCK) had a good week, as its shares rose 4.9% to close at US$119 following the release of its third-quarter results. Results overall were respectable, with statutory earnings of US$2.08 per share roughly in line with what the analysts had forecast. Revenues of US$3.7b came in 7.4% ahead of analyst predictions. 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 Crown Holdings after the latest results.
Taking into account the latest results, the most recent consensus for Crown Holdings from 13 analysts is for revenues of US$14.3b in 2027. If met, it would imply a reasonable 4.2% increase on its revenue over the past 12 months. Statutory earnings per share are predicted to grow 12% to US$8.32. Before this earnings report, the analysts had been forecasting revenues of US$14.0b and earnings per share (EPS) of US$8.18 in 2027. There doesn't appear to have been a major change in sentiment following the results, other than the small lift in revenue estimates.
See our latest analysis for Crown Holdings
Even though revenue forecasts increased, there was no change to the consensus price target of US$136, suggesting the analysts are focused on earnings as the driver of value creation. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. Currently, the most bullish analyst values Crown Holdings at US$155 per share, while the most bearish prices it at US$118. With such a narrow range of valuations, the analysts apparently share similar views on what they think the business is worth.
These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Crown Holdings' past performance and to peers in the same industry. It's clear from the latest estimates that Crown Holdings' rate of growth is expected to accelerate meaningfully, with the forecast 3.4% annualised revenue growth to the end of 2027 noticeably faster than its historical growth of 1.5% p.a. over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 3.4% annually. Factoring in the forecast acceleration in revenue, it's pretty clear that Crown Holdings is expected to grow at about the same rate as 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. There was also an upgrade to revenue estimates, although as we saw earlier, forecast growth is only expected to be about the same as the wider industry. The consensus price target held steady at US$136, with the latest estimates not enough to have an impact on their price targets.
With that in mind, we wouldn't be too quick to come to a conclusion on Crown Holdings. Long-term earnings power is much more important than next year's profits. We have forecasts for Crown Holdings going out to 2028, 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 Crown Holdings you should know about.
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