Cracker Barrel Old Country Store, Inc. (NASDAQ:CBRL) shares fell 6.1% to US$156 in the week since its latest second-quarter results. Cracker Barrel Old Country Store reported US$846m in revenue, roughly in line with analyst forecasts, although statutory earnings per share (EPS) of US$2.55 beat expectations, being 5.6% higher than what analysts expected. 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 analysts have changed their mind on Cracker Barrel Old Country Store after the latest results.
Following last week's earnings report, Cracker Barrel Old Country Store's eight analysts are forecasting 2020 revenues to be US$3.17b, approximately in line with the last 12 months. Statutory earnings per share are expected to shrink 4.6% to US$8.73 in the same period. Yet prior to the latest earnings, analysts had been forecasting revenues of US$3.18b and earnings per share (EPS) of US$8.68 in 2020. So it's pretty clear that, although analysts have updated their estimates, there's been no major change in expectations for the business following the latest results.
Analysts reconfirmed their price target of US$162, showing that the business is executing well and in line with expectations. 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. The most optimistic Cracker Barrel Old Country Store analyst has a price target of US$173 per share, while the most pessimistic values it at US$150. Still, with such a tight range of estimates, it suggests analysts have a pretty good idea of what they think the company is worth.
It can be useful to take a broader overview by seeing how analyst forecasts compare, both to the Cracker Barrel Old Country Store's past performance and to peers in the same market. We would highlight that Cracker Barrel Old Country Store's revenue growth is expected to slow, with forecast 1.5% increase next year well below the historical 2.1%p.a. growth over the last five years. By way of comparison, other companies in this market with analyst coverage, are forecast to grow their revenue at 8.4% per year. Factoring in the forecast slowdown in growth, it seems obvious that analysts still expect Cracker Barrel Old Country Store to grow slower than the wider market.
The Bottom Line
The most obvious conclusion from these results is that there's been no major change in the business' prospects in recent times, with analysts holding earnings per share steady, in line with previous estimates. Fortunately, analysts also reconfirmed their revenue estimates, suggesting sales are tracking in line with expectations - although our data does suggest that Cracker Barrel Old Country Store's revenues are expected to perform worse than the wider market. The consensus price target held steady at US$162, with the latest estimates not enough to have an impact on analysts' estimated valuations.
Still, the long-term prospects of the business are much more relevant than next year's earnings. We have estimates - from multiple Cracker Barrel Old Country Store analysts - going out to 2022, and you can see them free on our platform here.
You can also view our analysis of Cracker Barrel Old Country Store's balance sheet, and whether we think Cracker Barrel Old Country Store is carrying too much debt, for free on our platform here.
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