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It's been a good week for Corteva, Inc. (NYSE:CTVA) shareholders, because the company has just released its latest full-year results, and the shares gained 5.9% to US$42.66. Revenues were US$14b, approximately in line with whatthe analysts expected, although statutory earnings per share (EPS) crushed expectations, coming in at US$0.91, an impressive 23% ahead of estimates. 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. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.
View our latest analysis for Corteva
After the latest results, the 13 analysts covering Corteva are now predicting revenues of US$14.8b in 2021. If met, this would reflect a credible 6.0% improvement in sales compared to the last 12 months. Per-share earnings are expected to shoot up 107% to US$1.64. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$14.7b and earnings per share (EPS) of US$1.52 in 2021. The analysts seems to have become more bullish on the business, judging by their new earnings per share estimates.
There's been no major changes to the consensus price target of US$42.00, suggesting that the improved earnings per share outlook is not enough to have a long-term positive impact on the stock's valuation. 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 Corteva, with the most bullish analyst valuing it at US$55.00 and the most bearish at US$24.00 per share. Note the wide gap in analyst price targets? This implies to us that there is a fairly broad range of possible scenarios for the underlying business.
Of course, another way to look at these forecasts is to place them into context against the industry itself. The analysts are definitely expecting Corteva's growth to accelerate, with the forecast 6.0% growth ranking favourably alongside historical growth of 3.3% per annum over the past three years. Compare this with other companies in the same industry, which are forecast to grow their revenue 6.0% next year. Corteva is expected to grow at about the same rate as its industry, so it's not clear that we can draw any conclusions from its growth relative to competitors.
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 Corteva following these results. They also reconfirmed their revenue estimates, with the company predicted to grow at about the same rate as the wider industry. The consensus price target held steady at US$42.00, with the latest estimates not enough to have an impact on their price targets.