Yahoo Finance Crest Nicholson Holdings plc Earnings Missed Analyst Estimates: Here's What Analysts Are Forecasting Now
It's been a pretty great week for Crest Nicholson Holdings plc (LON:CRST) shareholders, with its shares surging 13% to UK£5.00 in the week since its latest annual results. It was not a great result overall. While revenues of UK£1.1b were in line with analyst predictions, earnings were less than expected, missing statutory estimates by 14% to hit UK£0.32 per share. This is an important time for investors, as they can track a company's performance in its report, look at what top analysts are forecasting for next year, and see if there has been any change to expectations for the business. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.
See our latest analysis for Crest Nicholson Holdings
Taking into account the latest results, the ten analysts covering Crest Nicholson Holdings provided consensus estimates of UK£973.7m revenue in 2020, which would reflect a chunky 10% decline on its sales over the past 12 months. Statutory earnings per share are expected to rise 9.7% to UK£0.35. Yet prior to the latest earnings, analysts had been forecasting revenues of UK£991.3m and earnings per share (EPS) of UK£0.37 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 minor downgrade to their earnings per share forecasts.
Although analysts have revised their earnings forecasts for next year, they've also lifted the consensus price target 9.5% to UK£4.55, suggesting the revised estimates are not indicative of a weaker long-term future for the business. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. The most optimistic Crest Nicholson Holdings analyst has a price target of UK£6.90 per share, while the most pessimistic values it at UK£3.68. Note the wide gap in analyst price targets? This implies to us that there is a fairly broad range of possible scenarios for the underlying business.
Another way to assess these estimates is by comparing them to past performance, and seeing whether analysts are more or less bullish relative to other companies in the market. We would highlight that sales are expected to reverse, with the forecast 10% revenue decline a notable change from historical growth of 10% over the last five years. Compare this with our data, which suggests that other companies in the same market are, in aggregate, expected to see their revenue grow 4.4% next year. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - analysts also expect Crest Nicholson Holdings to grow slower than the wider market.
The Bottom Line
The biggest concern with the new estimates is that analysts have reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Crest Nicholson Holdings. On the plus side, there were no major changes to revenue estimates; although analyst forecasts imply revenues will perform worse than the wider market. Analysts also upgraded their price target, suggesting that analysts believe the intrinsic value of the business is likely to improve over time.
With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have estimates - from multiple Crest Nicholson Holdings analysts - going out to 2023, 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.
If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. 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. Simply Wall St has no position in the stocks mentioned.
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