Analysts Are Updating Their Computacenter plc (LON:CCC) Estimates After Its Annual Results
Computacenter plc (LON:CCC) shareholders are probably feeling a little disappointed, since its shares fell 7.0% to UK£27.02 in the week after its latest full-year results. Computacenter missed revenue estimates by 4.8%, coming in atUK£6.9b, although statutory earnings per share (EPS) of UK£1.73 beat expectations, coming in 2.9% ahead of analyst estimates. 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. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.
View our latest analysis for Computacenter
Taking into account the latest results, Computacenter's eleven analysts currently expect revenues in 2024 to be UK£6.96b, approximately in line with the last 12 months. Statutory earnings per share are forecast to reduce 2.0% to UK£1.71 in the same period. Before this earnings report, the analysts had been forecasting revenues of UK£7.29b and earnings per share (EPS) of UK£1.74 in 2024. The consensus seems maybe a little more pessimistic, trimming their revenue forecasts after the latest results even though there was no change to its EPS estimates.
The average price target was steady at UK£31.66even though revenue estimates declined; likely suggesting the analysts place a higher value on earnings. 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 Computacenter at UK£33.50 per share, while the most bearish prices it at UK£26.50. Still, with such a tight range of estimates, it suggeststhe analysts have a pretty good idea of what they think the company is worth.
These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Computacenter's past performance and to peers in the same industry. It's pretty clear that there is an expectation that Computacenter's revenue growth will slow down substantially, with revenues to the end of 2024 expected to display 0.5% growth on an annualised basis. This is compared to a historical growth rate of 8.9% over the past five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 6.7% per year. Factoring in the forecast slowdown in growth, it seems obvious that Computacenter is also expected to grow slower than other industry participants.
The Bottom Line
The most important thing to take away is that there's been no major change in sentiment, with the analysts reconfirming that the business is performing in line with their previous earnings per share estimates. On the negative side, they also downgraded their revenue estimates, and forecasts imply they will perform worse than the wider industry. Even so, earnings are more important to the intrinsic value of the business. 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 in mind, we wouldn't be too quick to come to a conclusion on Computacenter. 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 Computacenter going out to 2026, and you can see them free on our platform here..
You still need to take note of risks, for example - Computacenter has 1 warning sign we think you should be aware of.
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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.
