Yahoo Finance Results: 3i Group plc Beat Earnings Expectations And Analysts Now Have New Forecasts
It's been a good week for 3i Group plc (LON:III) shareholders, because the company has just released its latest yearly results, and the shares gained 3.1% to UK£18.29. Revenues were UK£4.7b, approximately in line with expectations, although statutory earnings per share (EPS) performed substantially better. EPS of UK£4.74 were also better than expected, beating analyst predictions by 15%. 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 3i Group
After the latest results, the consensus from 3i Group's six analysts is for revenues of UK£3.16b in 2024, which would reflect a disturbing 33% decline in sales compared to the last year of performance. Statutory earnings per share are forecast to nosedive 48% to UK£2.49 in the same period. In the lead-up to this report, the analysts had been modelling revenues of UK£3.10b and earnings per share (EPS) of UK£2.48 in 2024. The consensus analysts don't seem to have seen anything in these results that would have changed their view on the business, given there's been no major change to their estimates.
The analysts reconfirmed their price target of UK£20.57, showing that the business is executing well and in line with expectations. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. Currently, the most bullish analyst values 3i Group at UK£23.90 per share, while the most bearish prices it at UK£14.72. 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. These estimates imply that sales are expected to slow, with a forecast annualised revenue decline of 33% by the end of 2024. This indicates a significant reduction from annual growth of 31% 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 11% annually for the foreseeable future. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - 3i Group is expected to lag the wider industry.
The Bottom Line
The most important thing to take away is that there's been no major change in sentiment, with the analysts reconfirming that the business is performing in line with their previous earnings per share estimates. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting sales are tracking in line with expectations - although our data does suggest that 3i Group's revenues are expected to perform worse than the wider industry. The consensus price target held steady at UK£20.57, with the latest estimates not enough to have an impact on their price targets.
With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have forecasts for 3i Group going out to 2026, and you can see them free on our platform here.
That said, it's still necessary to consider the ever-present spectre of investment risk. We've identified 3 warning signs with 3i Group (at least 2 which are a bit unpleasant) , and understanding them should be part of your investment process.
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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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