The Marzetti Company Just Missed Earnings - But Analysts Have Updated Their Models
The Marzetti Company (NASDAQ:MZTI) came out with its quarterly results last week, and we wanted to see how the business is performing and what industry forecasters think of the company following this report. Statutory earnings per share fell badly short of expectations, coming in at US$1.07, some 21% below analyst forecasts, although revenues were okay, approximately in line with analyst estimates at US$482m. 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 Marzetti after the latest results.
After the latest results, the six analysts covering Marzetti are now predicting revenues of US$2.00b in 2027. If met, this would reflect a credible 4.3% improvement in revenue compared to the last 12 months. Per-share earnings are expected to accumulate 7.3% to US$6.83. In the lead-up to this report, the analysts had been modelling revenues of US$2.00b and earnings per share (EPS) of US$6.64 in 2027. So the consensus seems to have become somewhat more optimistic on Marzetti's earnings potential following these results.
View our latest analysis for Marzetti
The consensus price target was unchanged at US$143, 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. The most optimistic Marzetti analyst has a price target of US$185 per share, while the most pessimistic values it at US$103. As you can see, analysts are not all in agreement on the stock's future, but the range of estimates is still reasonably narrow, which could suggest that the outcome is not totally unpredictable.
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. It's clear from the latest estimates that Marzetti's rate of growth is expected to accelerate meaningfully, with the forecast 5.8% annualised revenue growth to the end of 2027 noticeably faster than its historical growth of 4.2% p.a. over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 0.8% per year. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect Marzetti to grow faster than the wider industry.
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 Marzetti following these results. 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$143, with the latest estimates not enough to have an impact on their price targets.
Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have forecasts for Marzetti going out to 2029, and you can see them free on our platform here.
You can also see whether Marzetti is carrying too much debt, and whether its balance sheet is healthy, for free on our platform here.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.