Close Brothers Group plc (LON:CBG) missed earnings with its latest annual results, disappointing overly-optimistic forecasters. Close Brothers Group missed analyst forecasts, with revenues of UK£905m and statutory earnings per share (EPS) of UK£1.10, falling short by 4.0% and 2.7% respectively. 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. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.
Check out our latest analysis for Close Brothers Group
After the latest results, the ten analysts covering Close Brothers Group are now predicting revenues of UK£968.8m in 2023. If met, this would reflect a satisfactory 7.1% improvement in sales compared to the last 12 months. Per-share earnings are expected to rise 3.9% to UK£1.15. In the lead-up to this report, the analysts had been modelling revenues of UK£969.9m and earnings per share (EPS) of UK£1.24 in 2023. The analysts seem to have become a little more negative on the business after the latest results, given the small dip in their earnings per share numbers for next year.
It might be a surprise to learn that the consensus price target was broadly unchanged at UK£12.49, with the analysts clearly implying that the forecast decline in earnings is not expected to have much of an impact on valuation. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. The most optimistic Close Brothers Group analyst has a price target of UK£14.88 per share, while the most pessimistic values it at UK£9.40. This shows there is still a bit of diversity in estimates, but analysts don't appear to be totally split on the stock as though it might be a success or failure situation.
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. It's clear from the latest estimates that Close Brothers Group's rate of growth is expected to accelerate meaningfully, with the forecast 7.1% annualised revenue growth to the end of 2023 noticeably faster than its historical growth of 3.5% p.a. over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 5.8% annually. Factoring in the forecast acceleration in revenue, it's pretty clear that Close Brothers Group is expected to grow at about the same rate as 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. They also reconfirmed their revenue estimates, with the company predicted to grow at about the same rate as the wider industry. 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 said, the long-term trajectory of the company's earnings is a lot more important than next year. We have forecasts for Close Brothers Group going out to 2025, and you can see them free on our platform here.
Plus, you should also learn about the 1 warning sign we've spotted with Close Brothers Group .
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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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