Analysts' Revenue Estimates For Admiral Group plc (LON:ADM) Are Surging Higher
Admiral Group plc (LON:ADM) shareholders will have a reason to smile today, with the analysts making substantial upgrades to this year's statutory forecasts. The consensus estimated revenue numbers rose, with their view now clearly much more bullish on the company's business prospects. The stock price has risen 6.3% to UK£27.34 over the past week, suggesting investors are becoming more optimistic. Could this big upgrade push the stock even higher?
Following the upgrade, the current consensus from Admiral Group's nine analysts is for revenues of UK£4.7b in 2024 which - if met - would reflect a substantial 22% increase on its sales over the past 12 months. Statutory earnings per share are presumed to shoot up 27% to UK£1.44. Previously, the analysts had been modelling revenues of UK£4.2b and earnings per share (EPS) of UK£1.37 in 2024. Sentiment certainly seems to have improved in recent times, with a nice gain to revenue and a modest lift to earnings per share estimates.
See our latest analysis for Admiral Group
Although the analysts have upgraded their earnings estimates, there was no change to the consensus price target of UK£26.52, suggesting that the forecast performance does not have a long term impact on the company's valuation.
Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. It's clear from the latest estimates that Admiral Group's rate of growth is expected to accelerate meaningfully, with the forecast 22% annualised revenue growth to the end of 2024 noticeably faster than its historical growth of 17% p.a. over the past five years. Other similar companies in the industry (with analyst coverage) are also forecast to grow their revenue at 25% per year. Factoring in the forecast acceleration in revenue, it's pretty clear that Admiral Group is expected to grow at about the same rate as the wider industry.
The Bottom Line
The most important thing to take away from this upgrade is that analysts upgraded their earnings per share estimates for this year, expecting improving business conditions. There was also an upgrade to revenue estimates, although as we saw earlier, forecast growth is only expected to be about the same as the wider market. Seeing the dramatic upgrade to this year's forecasts, it might be time to take another look at Admiral Group.
Better yet, our automated discounted cash flow calculation (DCF) suggests Admiral Group could be moderately undervalued. You can learn more about our valuation methodology on our platform here.
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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.
