Investors in International Matthews Society (NASDAQ:MATW) had a strong week as its shares rose 2.3% to close at US$27.95 after its quarterly earnings release. Revenue was $422 million, roughly in line with analysts’ expectations, although statutory earnings per share (EPS) smashed expectations, coming in at $0.09, or 29% higher. more than the estimates. It’s an important time for investors, as they can follow a company’s performance in its report, watch what experts predict for next year, and see if there’s been a change in company expectations. ‘company. We thought readers would find it interesting to see analysts’ latest post-earnings (statutory) forecasts for next year.
Given the latest results, twin analysts at Matthews International currently expect revenue in 2023 to be $1.75 billion, which is roughly in line with the past 12 months. Matthews International is also expected to turn profitable, with statutory earnings of $1.90 per share. Prior to this earnings report, analysts were forecasting revenue of US$1.77 billion and earnings per share (EPS) of US$2.02 in 2023. Analysts appear to have become somewhat more negative on the company after the latest results, given the minor degradation. to their earnings per share for next year.
It might come as a surprise to learn that the consensus price target remained broadly unchanged at US$45.50, with analysts making it clear that the expected decline in earnings is unlikely to have much impact on valuation.
Looking now at the big picture, one of the ways we can make sense of these forecasts is to see how they compare to both past performance and industry growth estimates. It’s pretty clear that Matthews International’s revenue growth is expected to slow significantly, with revenue through the end of 2023 expected to show growth of 0.4% on an annualized basis. This compares to a historic growth rate of 2.0% over the past five years. Compare that with other companies (with analyst forecasts) in the industry, which overall are expected to see revenue growth of 7.3% per year. Given the expected slower growth, it seems obvious that Matthews International is also expected to grow slower than other players in the industry.
The biggest concern is that analysts have cut their earnings-per-share estimates, suggesting headwinds could be coming for Matthews International. On the positive side, there were no major changes in revenue estimates; although forecasts imply that revenues will underperform the industry as a whole. There was no real change from the consensus price target, suggesting that the company’s intrinsic value has not undergone major changes with the latest estimates.
That said, the company’s long-term earnings trajectory is much more important than next year. We have analyst estimates for Matthews International going through 2023, and you can see them for free on our platform here.
However, before you get too excited, we found out 2 warning signs for Matthews International (1 is a little worrying!) that you should be aware of.
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