Smurfit Westrock Set to Reveal Q4 Earnings, Analysts Anticipate Major Profit Increase
Dublin, Ireland-based Smurfit Westrock Plc (SW) offers paper and packaging solutions to the consumer and corrugated packaging sectors. With a market cap of $27.5 billion, Smurfit stands as one of the largest integrated producers of containerboard and high-graphics preprinted linerboard in the industry.
Q4 Expectations: Analysts Anticipate Strong Profit Growth
The company is set to announce its fourth-quarter results on Thursday, February 6. Analysts predict a non-GAAP profit of $0.71 per share, marking an impressive 255% increase from the $0.20 reported in the same quarter last year. However, Smurfit has had a varied earnings performance, surpassing expectations once in the last four quarters while falling short three times. In its last reported quarter, adjusted earnings per share declined 40.7% year-over-year to $0.48, missing estimates by 32.4%.
Future Earnings Projections: A Mixed Outlook
For the full fiscal year of 2024, Smurfit is projected to report an adjusted EPS of $2.65, down 12.3% from $3.02 in fiscal 2023. However, a rebound is anticipated for fiscal 2025, with earnings expected to increase by 21.9% year-over-year to $3.23 per share.
Stock Performance: A Mixed Bag Against Major Indices
The SW stock has risen by 8.4% over the past six months, falling short of the Consumer Discretionary Select Sector SPDR Fund’s (XLY) impressive 18.8% increase, but outpacing the S&P 500 Index ($SPX), which gained 5.7% during the same period.
Recent Results: Revenue Surges Despite Losses
Although Smurfit missed earnings estimates, its stock soared nearly 12% following the release of Q3 results on October 30. The company’s revenue impressed, showing a staggering 163.2% year-over-year growth to $7.7 billion, driven by acquisitions and increased corrugated volumes, despite lower pricing impacting its topline.
In the same quarter, Smurfit reported a net loss of $150 million on a GAAP basis, attributed to acquisition-related integration costs and heightened selling, general, and administrative (SG&A) expenses. Still, its non-GAAP adjusted EBITDA experienced significant growth, soaring nearly 141% year-over-year to $1.3 billion.
Market Sentiment: Analysts Favor Moderate Buy
The consensus on SW stock leans towards “Moderate Buy,” with a total of 13 analysts weighing in. Eight encourage a “Strong Buy,” two recommend “Moderate Buy,” and three advise holding the stock. The average price target stands at $61.58, suggesting a 16.3% upside potential from current levels.
On the date of publication, Aditya Sarawgi did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information, please view the Barchart Disclosure Policy here.
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