Wolverine World Wide, Inc. (NYSE:WWW) just released its second-quarter report and things are looking bullish. Results were good overall, with revenues beating analyst predictions by 9.7% to hit US$632m. Statutory earnings per share (EPS) came in at US$0.53, some 8.5% above whatthe analysts had expected. 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. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Wolverine World Wide after the latest results.
Taking into account the latest results, the most recent consensus for Wolverine World Wide from eight analysts is for revenues of US$2.39b in 2021 which, if met, would be a notable 11% increase on its sales over the past 12 months. Earnings are expected to improve, with Wolverine World Wide forecast to report a statutory profit of US$2.14 per share. Before this earnings report, the analysts had been forecasting revenues of US$2.28b and earnings per share (EPS) of US$1.96 in 2021. So there seems to have been a moderate uplift in sentiment following the latest results, given the upgrades to both revenue and earnings per share forecasts for next year.
Althoughthe analysts have upgraded their earnings estimates, there was no change to the consensus price target of US$44.00, suggesting that the forecast performance does not have a long term impact on the company's valuation. 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. There are some variant perceptions on Wolverine World Wide, with the most bullish analyst valuing it at US$50.00 and the most bearish at US$36.00 per share. As you can see, analysts are not all in agreement on the stock's future, but the range of estimates is still reasonably narrow, which could suggest that the outcome is not totally unpredictable.
Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. For example, we noticed that Wolverine World Wide's rate of growth is expected to accelerate meaningfully, with revenues forecast to exhibit 24% growth to the end of 2021 on an annualised basis. That is well above its historical decline of 5.9% a year over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in the industry are forecast to see their revenue grow 9.3% per year. Not only are Wolverine World Wide's revenues expected to improve, it seems that the analysts are also expecting it 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 Wolverine World Wide's earnings potential next year. Pleasantly, they also upgraded their revenue estimates, and their forecasts suggest the business is expected to grow faster than the wider industry. The consensus price target held steady at US$44.00, with the latest estimates not enough to have an impact on their price targets.
Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. At Simply Wall St, we have a full range of analyst estimates for Wolverine World Wide going out to 2023, and you can see them free on our platform here..
Don't forget that there may still be risks. For instance, we've identified 4 warning signs for Wolverine World Wide that 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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