As you might know, Kontoor Brands, Inc. (NYSE:KTB) just kicked off its latest second-quarter results with some very strong numbers. The company beat forecasts, with revenue of US$658m, some 3.9% above estimates, and statutory earnings per share (EPS) coming in at US$1.32, 56% ahead of expectations. 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. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.
After the latest results, the five analysts covering Kontoor Brands are now predicting revenues of US$3.11b in 2025. If met, this would reflect a meaningful 17% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to ascend 13% to US$5.10. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$3.05b and earnings per share (EPS) of US$4.73 in 2025. So the consensus seems to have become somewhat more optimistic on Kontoor Brands' earnings potential following these results.
View our latest analysis for Kontoor Brands
The consensus price target was unchanged at US$81.17, implying that the improved earnings outlook is not expected to have a long term impact on value creation for shareholders. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. There are some variant perceptions on Kontoor Brands, with the most bullish analyst valuing it at US$99.00 and the most bearish at US$49.00 per share. Note the wide gap in analyst price targets? This implies to us that there is a fairly broad range of possible scenarios for the underlying business.
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. It's clear from the latest estimates that Kontoor Brands' rate of growth is expected to accelerate meaningfully, with the forecast 38% annualised revenue growth to the end of 2025 noticeably faster than its historical growth of 3.9% p.a. over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 5.7% per year. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect Kontoor Brands to grow faster than the wider industry.
The Bottom Line
The most important thing here is that the analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards Kontoor Brands following these results. Fortunately, they also reconfirmed their revenue numbers, suggesting that it's tracking in line with expectations. Additionally, our data suggests that revenue is expected to grow faster than the wider industry. The consensus price target held steady at US$81.17, 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. We have forecasts for Kontoor Brands going out to 2027, and you can see them free on our platform here.
That said, it's still necessary to consider the ever-present spectre of investment risk. We've identified 2 warning signs with Kontoor Brands , and understanding these should be part of your investment process.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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.