Yahoo Finance B&M European Value Retail S.A. Just Released Its Half-Year And Analysts Have Been Updating Their Estimates
Last week saw the newest interim earnings release from B&M European Value Retail S.A. (LON:BME), an important milestone in the company's journey to build a stronger business. It was a credible result overall, with revenues of UK£1.9b and earnings per share of UK£0.20 both in line with analyst estimates, showing that B&M European Value Retail is executing in line with expectations. Following the result, 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. With this in mind, we've gathered the latest forecasts to see what analysts are expecting for next year.
See our latest analysis for B&M European Value Retail
Following the latest results, B&M European Value Retail's 15 analysts are now forecasting revenues of UK£4.03b in 2020. This would be an okay 5.3% improvement in sales compared to the last 12 months. Earnings per share are expected to leap 50% to UK£0.20. In the lead-up to this report, analysts had been modelling revenues of UK£4.03b and earnings per share (EPS) of UK£0.21 in 2020. So it looks like there's been a small decline in overall sentiment after the recent results - there's been no major change to revenue estimates, but analysts did make a small dip in their earnings per share forecasts.
It might be a surprise to learn that the consensus price target was broadly unchanged at UK£4.22, with analysts clearly implying that the forecast decline in earnings is not expected to have much of an impact on valuation. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. There are some variant perceptions on B&M European Value Retail, with the most bullish analyst valuing it at UK£4.75 and the most bearish at UK£3.40 per share. There are definitely some different views on the stock, but the range of estimates is not wide enough as to imply that the situation is unforecastable, in our view.
One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. We would highlight that B&M European Value Retail's revenue growth is expected to slow, with forecast 5.3% increase next year well below the historical 18%p.a. growth over the last five years. Juxtapose this against the other companies in the market with analyst coverage, which are forecast to grow their revenues (in aggregate) 3.1% next year. Even after the forecast slowdown in growth, it seems obvious that analysts still thinkB&M European Value Retail will grow faster than the wider market.
The Bottom Line
The biggest highlight of the new consensus is that analysts have reduced their earnings per share estimates, suggesting business headwinds could lay ahead for B&M European Value Retail. Happily, there were no major changes to revenue forecasts, with analysts still expecting the business to grow faster than the wider market. 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.
With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have forecasts for B&M European Value Retail going out to 2024, and you can see them free on our platform here.
You can also view our analysis of B&M European Value Retail's balance sheet, and whether we think B&M European Value Retail is carrying too much debt, for free on our platform here.
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