Earnings Beat: O-I Glass, Inc. Just Beat Analyst Forecasts, And Analysts Have Been Updating Their Models
O-I Glass, Inc. (NYSE:OI) defied analyst predictions to release its third-quarter results, which were ahead of market expectations. The company beat both earnings and revenue forecasts, with revenue of US$1.6b, some 2.8% above estimates, and statutory earnings per share (EPS) coming in at US$2.06, 594% ahead of expectations. 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. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.
See our latest analysis for O-I Glass
Taking into account the latest results, the eleven analysts covering O-I Glass provided consensus estimates of US$6.03b revenue in 2021, which would reflect a measurable 3.1% decline on its sales over the past 12 months. Statutory earnings per share are forecast to sink 18% to US$1.62 in the same period. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$6.03b and earnings per share (EPS) of US$1.53 in 2021. So the consensus seems to have become somewhat more optimistic on O-I Glass' earnings potential following these results.
The consensus price target was unchanged at US$12.18, implying that the improved earnings outlook is not expected to have a long term impact on value creation for shareholders. 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. Currently, the most bullish analyst values O-I Glass at US$15.00 per share, while the most bearish prices it at US$10.00. There are definitely some different views on the stock, but the range of estimates is not wide enough as to imply that the situation is unforecastable, in our view.
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. These estimates imply that sales are expected to slow, with a forecast revenue decline of 3.1%, a significant reduction from annual growth of 0.5% over the last five years. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 4.3% next year. It's pretty clear that O-I Glass' revenues are expected to perform substantially worse than the wider industry.
The Bottom Line
The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around O-I Glass' earnings potential next year. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting sales are tracking in line with expectations - although our data does suggest that O-I Glass' revenues are expected to perform worse than the wider industry. The consensus price target held steady at US$12.18, 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. We have estimates - from multiple O-I Glass analysts - going out to 2024, and you can see them free on our platform here.
Don't forget that there may still be risks. For instance, we've identified 3 warning signs for O-I Glass (1 is a bit unpleasant) you should be aware of.
This article by Simply Wall St is general in nature. 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.
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