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Silgan Holdings Inc. Beat Analyst Estimates: See What The Consensus Is Forecasting For Next Year

Shareholders might have noticed that Silgan Holdings Inc. (NASDAQ:SLGN) filed its third-quarter result this time last week. The early response was not positive, with shares down 10.0% to US$35.74 in the past week. The result was positive overall - although revenues of US$1.5b were in line with what the analysts predicted, Silgan Holdings surprised by delivering a statutory profit of US$1.01 per share, modestly greater than expected. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Silgan Holdings after the latest results.

See our latest analysis for Silgan Holdings

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Taking into account the latest results, the current consensus from Silgan Holdings' twelve analysts is for revenues of US$5.04b in 2021, which would reflect an okay 6.3% increase on its sales over the past 12 months. Per-share earnings are expected to swell 17% to US$2.99. In the lead-up to this report, the analysts had been modelling revenues of US$5.01b and earnings per share (EPS) of US$2.86 in 2021. So the consensus seems to have become somewhat more optimistic on Silgan Holdings' earnings potential following these results.

The consensus price target was unchanged at US$40.67, implying that the improved earnings outlook is not expected to have a long term impact on value creation for shareholders. 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. There are some variant perceptions on Silgan Holdings, with the most bullish analyst valuing it at US$46.00 and the most bearish at US$32.00 per share. 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. Next year brings more of the same, according to the analysts, with revenue forecast to grow 6.3%, in line with its 5.5% annual growth over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenues grow 4.1% per year. So although Silgan Holdings is expected to maintain its revenue growth rate, it's definitely expected to grow faster 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 Silgan Holdings' earnings potential next year. Fortunately, they also reconfirmed their revenue numbers, suggesting sales are tracking in line with expectations - and our data suggests that revenues are expected to grow faster than the wider industry. The consensus price target held steady at US$40.67, 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 forecasts for Silgan Holdings going out to 2024, and you can see them free on our platform here.

Before you take the next step you should know about the 2 warning signs for Silgan Holdings (1 doesn't sit too well with us!) that we have uncovered.

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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