Yahoo Finance Oxford Instruments plc Just Beat Analyst Forecasts, And Analysts Have Been Updating Their Predictions
It's been a pretty great week for Oxford Instruments plc (LON:OXIG) shareholders, with its shares surging 11% to UK£14.00 in the week since its latest full-year results. Revenues disappointed slightly, as sales of UK£317m were 5.6% below what the analysts had predicted. Profits were a relative bright spot, with statutory per-share earnings of UK£0.58 coming in 12% above what was anticipated. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.
Check out our latest analysis for Oxford Instruments
After the latest results, the consensus from Oxford Instruments' eight analysts is for revenues of UK£295.6m in 2021, which would reflect a discernible 6.9% decline in sales compared to the last year of performance. Statutory earnings per share are expected to dive 26% to UK£0.41 in the same period. Yet prior to the latest earnings, the analysts had been anticipated revenues of UK£307.2m and earnings per share (EPS) of UK£0.41 in 2021. So it looks like the analysts have become a bit less optimistic after the latest results announcement, with revenues expected to fall even as the company is supposed to maintain EPS.
The average price target was steady at UK£13.21 even though revenue estimates declined; likely suggesting the analysts place a higher value on earnings. 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. Currently, the most bullish analyst values Oxford Instruments at UK£14.50 per share, while the most bearish prices it at UK£12.10. With such a narrow range of valuations, the analysts apparently share similar views on what they think the business is worth.
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. One more thing stood out to us about these estimates, and it's the idea that Oxford Instruments'decline is expected to accelerate, with revenues forecast to fall 6.9% next year, topping off a historical decline of 1.8% a year over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenue grow 3.6% per year. So while a broad number of companies are forecast to decline, unfortunately Oxford Instruments is expected to see its sales affected worse than other companies in the 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. Still, earnings per share are more important to value creation for shareholders. 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 in mind, we wouldn't be too quick to come to a conclusion on Oxford Instruments. 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 Oxford Instruments going out to 2023, and you can see them free on our platform here..
We don't want to rain on the parade too much, but we did also find 2 warning signs for Oxford Instruments (1 shouldn't be ignored!) that you need to be mindful of.
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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. Thank you for reading.
