Yahoo Finance Bellway p.l.c. Earnings Missed Analyst Estimates: Here's What Analysts Are Forecasting Now
Investors in Bellway p.l.c. (LON:BWY) had a good week, as its shares rose 9.6% to close at UK£17.75 following the release of its annual results. Statutory earnings per share fell badly short of expectations, coming in at UK£1.96, some 40% below analyst forecasts, although revenues were okay, approximately in line with analyst estimates at UK£3.5b. 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. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.
See our latest analysis for Bellway
Following last week's earnings report, Bellway's 15 analysts are forecasting 2023 revenues to be UK£3.55b, approximately in line with the last 12 months. Per-share earnings are expected to shoot up 88% to UK£3.70. In the lead-up to this report, the analysts had been modelling revenues of UK£3.58b and earnings per share (EPS) of UK£3.56 in 2023. The analysts seems to have become more bullish on the business, judging by their new earnings per share estimates.
The consensus price target fell 5.8% to UK£27.81, suggesting the increase in earnings forecasts was not enough to offset other the analysts concerns. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. There are some variant perceptions on Bellway, with the most bullish analyst valuing it at UK£36.70 and the most bearish at UK£20.30 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.
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. We would highlight that Bellway's revenue growth is expected to slow, with the forecast 0.3% annualised growth rate until the end of 2023 being well below the historical 2.4% p.a. growth over the last five years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 1.5% annually. Factoring in the forecast slowdown in growth, it seems obvious that Bellway is also expected to grow slower than other industry participants.
The Bottom Line
The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around Bellway's earnings potential next year. On the plus side, there were no major changes to revenue estimates; although forecasts imply revenues will perform worse than the wider industry. Furthermore, the analysts also cut their price targets, suggesting that the latest news has led to greater pessimism about the intrinsic value of the business.
With that in mind, we wouldn't be too quick to come to a conclusion on Bellway. Long-term earnings power is much more important than next year's profits. At Simply Wall St, we have a full range of analyst estimates for Bellway going out to 2025, and you can see them free on our platform here..
You should always think about risks though. Case in point, we've spotted 3 warning signs for Bellway you should be aware of.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
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.
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