SpartanNash Company (NASDAQ:SPTN) shareholders are probably feeling a little disappointed, since its shares fell 6.7% to US$21.91 in the week after its latest third-quarter results. It looks like a pretty bad result, all things considered. Although revenues of US$2.3b were in line with analyst predictions, statutory earnings fell badly short, missing estimates by 39% to hit US$0.32 per share. 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. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.
See our latest analysis for SpartanNash
Taking into account the latest results, the most recent consensus for SpartanNash from five analysts is for revenues of US$10.1b in 2024. If met, it would imply a reasonable 2.9% increase on its revenue over the past 12 months. Statutory earnings per share are predicted to leap 92% to US$2.37. Before this earnings report, the analysts had been forecasting revenues of US$10.1b and earnings per share (EPS) of US$2.48 in 2024. So it looks like there's been a small decline in overall sentiment after the recent results - there's been no major change to revenue estimates, but the analysts did make a minor downgrade to their earnings per share forecasts.
The consensus price target held steady at US$27.00, with the analysts seemingly voting that their lower forecast earnings are not expected to lead to a lower stock price in the foreseeable future. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. Currently, the most bullish analyst values SpartanNash at US$34.00 per share, while the most bearish prices it at US$22.00. This shows there is still a bit of diversity in estimates, but analysts don't appear to be totally split on the stock as though it might be a success or failure situation.
One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. It's pretty clear that there is an expectation that SpartanNash's revenue growth will slow down substantially, with revenues to the end of 2024 expected to display 2.3% growth on an annualised basis. This is compared to a historical growth rate of 3.7% 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 4.0% per year. Factoring in the forecast slowdown in growth, it seems obvious that SpartanNash is also expected to grow slower than other industry participants.
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. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting that it's tracking in line with expectations. Although our data does suggest that SpartanNash's revenue is expected to perform worse than the wider industry. The consensus price target held steady at US$27.00, 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 SpartanNash. Long-term earnings power is much more important than next year's profits. At Simply Wall St, we have a full range of analyst estimates for SpartanNash going out to 2025, and you can see them free on our platform here..
It is also worth noting that we have found 1 warning sign for SpartanNash that you need to take into consideration.
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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.
