Yahoo Finance Shaftesbury PLC Earnings Missed Analyst Estimates: Here's What Analysts Are Forecasting Now
It's been a sad week for Shaftesbury PLC (LON:SHB), who've watched their investment drop 13% to UK£5.84 in the week since the company reported its half-yearly result. It looks like a pretty bad result, all things considered. Although revenues of UK£63m were in line with analyst predictions, statutory earnings fell badly short, missing estimates by 77% to hit UK£0.085 per share. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.
Check out our latest analysis for Shaftesbury
Taking into account the latest results, the current consensus, from the five analysts covering Shaftesbury, is for revenues of UK£112.3m in 2020, which would reflect an uncomfortable 11% reduction in Shaftesbury's sales over the past 12 months. Losses are forecast to balloon 137% to UK£2.32 per share. Yet prior to the latest earnings, the analysts had been forecasting revenues of UK£113.7m and losses of UK£0.64 per share in 2020. While this year's revenue estimates held steady, there was also a loss per share expectations, suggesting the consensus has a bit of a mixed view on the stock.
With the increase in forecast losses for next year, it's perhaps no surprise to see that the average price target dipped 5.1% to UK£6.52, with the analysts signalling that growing losses would be a definite concern. 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 Shaftesbury at UK£9.15 per share, while the most bearish prices it at UK£4.87. 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.
Of course, another way to look at these forecasts is to place them into context against the industry itself. These estimates imply that sales are expected to slow, with a forecast revenue decline of 11%, a significant reduction from annual growth of 6.1% 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 4.7% annually for the foreseeable future. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Shaftesbury is expected to lag the wider industry.
The Bottom Line
The most important thing to note is the forecast of increased losses next year, suggesting all may not be well at Shaftesbury. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting sales are tracking in line with expectations - although our data does suggest that Shaftesbury's revenues are expected to perform worse than the wider industry. The consensus price target fell measurably, with the analysts seemingly not reassured by the latest results, leading to a lower estimate of Shaftesbury's future valuation.
With that in mind, we wouldn't be too quick to come to a conclusion on Shaftesbury. 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 Shaftesbury going out to 2022, 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 Shaftesbury you should be aware of, and 1 of them shouldn't be ignored.
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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.
