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Shareholders might have noticed that Woolworths Group Limited (ASX:WOW) filed its interim result this time last week. The early response was not positive, with shares down 5.6% to AU$33.50 in the past week. It was a credible result overall, with revenues of AU$35b and statutory earnings per share of AU$1.32 both in line with analyst estimates, showing that Woolworths Group is executing in line with expectations. 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. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.
Check out our latest analysis for Woolworths Group
Taking into account the latest results, the most recent consensus for Woolworths Group from 14 analysts is for revenues of AU$67.4b in 2024. If met, it would imply a modest 2.4% increase on its revenue over the past 12 months. Woolworths Group is also expected to turn profitable, with statutory earnings of AU$0.23 per share. Before this earnings report, the analysts had been forecasting revenues of AU$68.0b and earnings per share (EPS) of AU$0.27 in 2024. The analysts seem to have become more bearish following the latest results. While there were no changes to revenue forecasts, there was a substantial drop in EPS estimates.
It might be a surprise to learn that the consensus price target was broadly unchanged at AU$36.54, with the analysts clearly implying that the forecast decline in earnings is not expected to have much of an impact on valuation. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. The most optimistic Woolworths Group analyst has a price target of AU$42.00 per share, while the most pessimistic values it at AU$27.50. 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.
Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. The analysts are definitely expecting Woolworths Group's growth to accelerate, with the forecast 5.0% annualised growth to the end of 2024 ranking favourably alongside historical growth of 2.1% per annum over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 3.5% annually. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect Woolworths Group to grow faster than the wider industry.