Capri Holdings Limited Just Reported Surprise Loss: Here’s What Analysts Think Will Happen Next
It’s been a good week for Capri Holdings Limited (NYSE: CPRI), as the company just released its latest annual results, and shares gained 8.3% to US $ 56.71. Revenues of US $ 4.1 billion exceeded expectations by 4.5%. Unfortunately, statutory earnings per share (EPS) fell well below the mark, translating into a loss of US $ 0.41 from previous analysts’ expectations for earnings. Following the result, analysts updated their earnings model, and it would be good to know if they think there has been a strong change in the outlook for the company, or if this is the status quo. . We thought readers might find it interesting to see analysts’ latest (statutory) post-earnings forecasts for next year.
NYSE: Profits and Revenue Growth CPRI May 30, 2021
Based on the latest results, the most recent consensus for Capri Holdings of 20 analysts is for revenue of US $ 5.15 billion in 2022, which, if achieved, would represent a whopping increase of 27 % of its sales in the last 12 months. Capri Holdings is also expected to become profitable, with statutory profit of $ 3.63 per share. In preparing this report, analysts modeled revenues of US $ 4.97 billion and earnings per share (EPS) of US $ 3.42 in 2022. There appears to have been a slight increase in sentiment following the latest results, with analysts becoming a little more optimistic in their forecasts for both revenue and earnings.
It is not surprising to learn that analysts have raised their price target for Capri Holdings by 11% to US $ 64.11 as a result of these upgrades. The consensus price target is only an average of the analysts’ individual targets, so it might be helpful to see how wide the range of the underlying estimates is. Currently, the most bullish analyst values Capri Holdings at US $ 82.00 per share, while the most bearish the price at US $ 43.50. This is a fairly wide range of estimates, suggesting that analysts are predicting a wide range of possible outcomes for the business.
Of course, another way to look at these forecasts is to put them in context with the industry itself. It is clear from the latest estimates that Capri Holdings’ growth rate is expected to accelerate significantly, with annualized revenue growth of 27% expected through the end of 2022 significantly faster than its historic growth of 0.6. % per year over the past five years. Compare that with other companies in the same industry, which are expected to increase their revenues by 9.7% per year. Given the expected acceleration in revenues, it’s pretty clear that Capri Holdings is expected to grow much faster than its industry.
The bottom line
The most important thing here is that analysts have updated their earnings per share estimates, suggesting that there has been a marked increase in optimism towards Capri Holdings following these results. Pleasantly, they’ve also updated their revenue estimates, and their forecast suggests the company is expected to grow faster than the industry as a whole. We note an upgrade in the price target, suggesting that analysts believe the company’s intrinsic value is likely to improve over time.
With this in mind, we still believe that the long-term trajectory of the company is much more important for investors to consider. We have a forecast for Capri Holdings through 2026, and you can view it for free on our platform here.
Even so, be aware that Capri Holdings shows 1 warning sign in our investment analysis , you should know …
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