Revenue Beat: Persimmon Plc Beat Analyst Estimates By 7.5%

Last week, you might have seen that Persimmon Plc (LON:PSN) released its annual result to the market. The early response was not positive, with shares down 4.7% to UK£13.07 in the past week. It was a workmanlike result, with revenues of UK£2.8b coming in 7.5% ahead of expectations, and statutory earnings per share of UK£0.80, in line with analyst appraisals. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Persimmon after the latest results.

View our latest analysis for Persimmon

earnings-and-revenue-growth

Following last week's earnings report, Persimmon's 16 analysts are forecasting 2024 revenues to be UK£2.77b, approximately in line with the last 12 months. Statutory per-share earnings are expected to be UK£0.81, roughly flat on the last 12 months. Before this earnings report, the analysts had been forecasting revenues of UK£2.73b and earnings per share (EPS) of UK£0.87 in 2024. 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 the analysts did make a minor downgrade to their earnings per share forecasts.

It might be a surprise to learn that the consensus price target was broadly unchanged at UK£14.87, with the analysts clearly implying that the forecast decline in earnings is not expected to have much of an impact on valuation. 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. Currently, the most bullish analyst values Persimmon at UK£23.00 per share, while the most bearish prices it at UK£11.90. 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.

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. One thing that stands out from these estimates is that shrinking revenues are expected to moderate over the period ending 2024 compared to the historical decline of 2.0% per annum 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 4.7% per year. So it's pretty clear that, while it does have declining revenues, the analysts also expect Persimmon to suffer worse than the wider industry.

The Bottom Line

The most important thing to take away is that the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting that it's tracking in line with expectations. Although our data does suggest that Persimmon's revenue is expected to perform worse than the wider industry. The consensus price target held steady at UK£14.87, with the latest estimates not enough to have an impact on their price targets.

Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. At Simply Wall St, we have a full range of analyst estimates for Persimmon going out to 2026, and you can see them free on our platform here..

You should always think about risks though. Case in point, we've spotted 2 warning signs for Persimmon 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.