Cochlear Limited (ASX:COH) last week reported its latest half-yearly results, which makes it a good time for investors to dive in and see if the business is performing in line with expectations. Cochlear reported in line with analyst predictions, delivering revenues of AU$1.1b and statutory earnings per share of AU$2.91, suggesting the business is executing well and in line with its plan. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

See our latest analysis for Cochlear  earnings-and-revenue-growth

Taking into account the latest results, the current consensus from Cochlear's 16 analysts is for revenues of AU$2.28b in 2024. This would reflect a modest 6.0% increase on its revenue over the past 12 months. Per-share earnings are expected to climb 12% to AU$6.00. Yet prior to the latest earnings, the analysts had been anticipated revenues of AU$2.26b and earnings per share (EPS) of AU$5.83 in 2024. The analysts seems to have become more bullish on the business, judging by their new earnings per share estimates.

There's been no major changes to the consensus price target of AU$281, suggesting that the improved earnings per share outlook is not enough to have a long-term positive impact on the stock's valuation. 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 Cochlear, with the most bullish analyst valuing it at AU$330 and the most bearish at AU$220 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.



Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. It's clear from the latest estimates that Cochlear's rate of growth is expected to accelerate meaningfully, with the forecast 12% annualised revenue growth to the end of 2024 noticeably faster than its historical growth of 8.3% p.a. over the past five years. Other similar companies in the industry (with analyst coverage) are also forecast to grow their revenue at 11% per year. Cochlear is expected to grow at about the same rate as its industry, so it's not clear that we can draw any conclusions from its growth relative to competitors.

The Bottom Line

The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around Cochlear's earnings potential next year. They also reconfirmed their revenue estimates, with the company predicted to grow at about the same rate as the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.

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 Cochlear going out to 2026, and you can see them free on our platform here..

Another thing to consider is whether management and directors have been buying or selling stock recently. We provide an overview of all open market stock trades  for the last twelve months on our platform, here.

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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.