U.S. Markets closed
  • S&P 500

    4,411.79
    +44.31 (+1.01%)
     
  • Dow 30

    35,061.55
    +238.20 (+0.68%)
     
  • Nasdaq

    14,836.99
    +152.39 (+1.04%)
     
  • Russell 2000

    2,209.65
    +10.17 (+0.46%)
     
  • Crude Oil

    72.17
    +0.26 (+0.36%)
     
  • Gold

    1,802.10
    -3.30 (-0.18%)
     
  • Silver

    25.24
    -0.14 (-0.56%)
     
  • EUR/USD

    1.1770
    -0.0003 (-0.0235%)
     
  • 10-Yr Bond

    1.2860
    +0.0210 (+1.66%)
     
  • Vix

    17.20
    -0.49 (-2.77%)
     
  • GBP/USD

    1.3754
    -0.0013 (-0.0977%)
     
  • USD/JPY

    110.5100
    +0.3950 (+0.3587%)
     
  • BTC-USD

    34,102.21
    +559.53 (+1.67%)
     
  • CMC Crypto 200

    786.33
    -7.40 (-0.93%)
     
  • FTSE 100

    7,027.58
    +59.28 (+0.85%)
     
  • Nikkei 225

    27,548.00
    +159.80 (+0.58%)
     

Analysts Are Updating Their Boral Limited (ASX:BLD) Estimates After Its Interim Results

  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
·3 min read
In this article:
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.

Boral Limited (ASX:BLD) shareholders are probably feeling a little disappointed, since its shares fell 6.5% to AU$5.07 in the week after its latest interim results. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. 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 Boral

earnings-and-revenue-growth
earnings-and-revenue-growth

Taking into account the latest results, Boral's ten analysts currently expect revenues in 2021 to be AU$5.35b, approximately in line with the last 12 months. Earnings are expected to improve, with Boral forecast to report a statutory profit of AU$0.25 per share. In the lead-up to this report, the analysts had been modelling revenues of AU$5.56b and earnings per share (EPS) of AU$0.19 in 2021. Although the analysts have lowered their sales forecasts, they've also made a great increase in their earnings per share estimates, which implies there's been something of an uptick in sentiment following the latest results.

The consensus has made no major changes to the price target of AU$5.40, suggesting the forecast improvement in earnings is expected to offset the decline in revenues next year. 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. The most optimistic Boral analyst has a price target of AU$6.10 per share, while the most pessimistic values it at AU$5.00. Even so, with a relatively close grouping of estimates, it looks like the analysts are quite confident in their valuations, suggesting Boral is an easy business to forecast or the the analysts are all using similar assumptions.

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 1.1%, a significant reduction from annual growth of 8.9% over the last five years. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 6.9% next year. It's pretty clear that Boral's revenues are expected to perform substantially worse than the wider industry.

The Bottom Line

The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around Boral's earnings potential next year. On the negative side, they also downgraded their revenue estimates, and forecasts imply revenues will perform worse than the wider industry. With that said, earnings are more important to the long-term value of the business. The consensus price target held steady at AU$5.40, 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 estimates - from multiple Boral analysts - going out to 2025, and you can see them free on our platform here.

Plus, you should also learn about the 2 warning signs we've spotted with Boral (including 1 which is potentially serious) .

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.