Yahoo Finance Augean plc (LON:AUG) Just Reported And Analysts Have Been Lifting Their Price Targets
Shareholders of Augean plc (LON:AUG) will be pleased this week, given that the stock price is up 14% to UK£2.28 following its latest annual results. Revenues came in 2.1% below expectations, at UK£92m. Statutory earnings per share were relatively better off, with a per-share profit of UK£0.13 being roughly in line with analyst estimates. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.
View our latest analysis for Augean
Taking into account the latest results, Augean's dual analysts currently expect revenues in 2021 to be UK£90.6m, approximately in line with the last 12 months. Statutory earnings per share are predicted to shoot up 33% to UK£0.17. Before this earnings report, the analysts had been forecasting revenues of UK£98.3m and earnings per share (EPS) of UK£0.17 in 2021. The consensus seems maybe a little more pessimistic, trimming their revenue forecasts after the latest results even though there was no change to its EPS estimates.
The analysts have also increased their price target 6.7% to UK£2.40, clearly signalling that lower revenue forecasts next year are not expected to have a material impact on Augean's valuation.
Of course, another way to look at these forecasts is to place them into context against the industry itself. We would highlight that sales are expected to reverse, with a forecast 1.1% annualised revenue decline to the end of 2021. That is a notable change from historical growth of 10% over the last five years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 5.9% annually for the foreseeable future. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Augean is expected to lag the wider industry.
The Bottom Line
The most obvious conclusion is that there's been no major change in the business' prospects in recent times, with the analysts holding their earnings forecasts steady, in line with previous estimates. On the negative side, they also downgraded their revenue estimates, and forecasts imply revenues will perform worse than the wider industry. Even so, earnings per share are more important to the intrinsic value of the business. We note an upgrade to the price target, suggesting that the analysts believes the intrinsic value of the business is likely to improve over time.
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 analyst estimates for Augean going out as far as 2023, and you can see them free on our platform here.
You should always think about risks though. Case in point, we've spotted 1 warning sign for Augean you should be aware of.
This article by Simply Wall St is general in nature. 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.
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