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It's been a pretty great week for Beacon Lighting Group Limited (ASX:BLX) shareholders, with its shares surging 11% to AU$2.02 in the week since its latest full-year results. The result was positive overall - although revenues of AU$289m were in line with what the analysts predicted, Beacon Lighting Group surprised by delivering a statutory profit of AU$0.17 per share, modestly greater than expected. 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. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.
Taking into account the latest results, the current consensus, from the three analysts covering Beacon Lighting Group, is for revenues of AU$279.5m in 2022, which would reflect a noticeable 3.5% reduction in Beacon Lighting Group's sales over the past 12 months. Statutory earnings per share are expected to nosedive 27% to AU$0.12 in the same period. In the lead-up to this report, the analysts had been modelling revenues of AU$284.4m and earnings per share (EPS) of AU$0.11 in 2022. So the consensus seems to have become somewhat more optimistic on Beacon Lighting Group's earnings potential following these results.
There's been no major changes to the consensus price target of AU$2.20, suggesting that the improved earnings per share outlook is not enough to have a long-term positive impact on the stock's 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 Beacon Lighting Group analyst has a price target of AU$2.30 per share, while the most pessimistic values it at AU$2.10. This is a very narrow spread of estimates, implying either that Beacon Lighting Group is an easy company to value, or - more likely - the analysts are relying heavily on some key 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 annualised revenue decline of 3.5% by the end of 2022. This indicates a significant reduction from annual growth of 6.7% 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 4.8% annually for the foreseeable future. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Beacon Lighting Group is expected to lag the wider industry.
The Bottom Line
The most important thing here is that the analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards Beacon Lighting Group following these results. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting sales are tracking in line with expectations - although our data does suggest that Beacon Lighting Group's revenues are expected to perform worse than 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.
Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. At Simply Wall St, we have a full range of analyst estimates for Beacon Lighting Group going out to 2024, and you can see them free on our platform here..
However, before you get too enthused, we've discovered 2 warning signs for Beacon Lighting Group (1 is concerning!) that you should be aware of.
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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