Tempur Sealy International, Inc. (NYSE:TPX) just released its latest quarterly report and things are not looking great. Results look to have been somewhat negative - revenue fell 3.5% short of analyst estimates at US$1.2b, and statutory earnings of US$0.60 per share missed forecasts by 5.4%. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.

Check out our latest analysis for Tempur Sealy International

Taking into account the latest results, Tempur Sealy International's ten analysts currently expect revenues in 2024 to be US$4.91b, approximately in line with the last 12 months. Statutory earnings per share are predicted to expand 15% to US$2.47. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$5.02b and earnings per share (EPS) of US$2.64 in 2024. The analysts are less bullish than they were before these results, given the reduced revenue forecasts and the minor downgrade to earnings per share expectations.

Despite the cuts to forecast earnings, there was no real change to the US$58.43 price target, showing that the analysts don't think the changes have a meaningful impact on its intrinsic value. 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. The most optimistic Tempur Sealy International analyst has a price target of US$65.00 per share, while the most pessimistic values it at US$52.00. Still, with such a tight range of estimates, it suggeststhe analysts have a pretty good idea of what they think the company is worth.

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 pretty clear that there is an expectation that Tempur Sealy International's revenue growth will slow down substantially, with revenues to the end of 2024 expected to display 1.6% growth on an annualised basis. This is compared to a historical growth rate of 11% over the past five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 5.8% per year. So it's pretty clear that, while revenue growth is expected to slow down, the wider industry is also expected to grow faster than Tempur Sealy International.

The Bottom Line

The most important thing to take away is that the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. On the negative side, they also downgraded their revenue estimates, and forecasts imply they will perform worse than the wider industry. The consensus price target held steady at US$58.43, 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 Tempur Sealy International going out to 2026, and you can see them free on our platform here..

That said, it's still necessary to consider the ever-present spectre of investment risk. We've identified 1 warning sign with Tempur Sealy International , and understanding this should be part of your investment process.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.