It's been a good week for Brewin Dolphin Holdings PLC (LON:BRW) shareholders, because the company has just released its latest annual results, and the shares gained 4.8% to UK£3.47. It looks like the results were a bit of a negative overall. While revenues of UK£339m were in line with analyst predictions, earnings were less than expected, missing estimates by 2.9% to hit UK£0.17 per share. This is an important time for investors, as they can track a company's performance in its report, look at what top analysts 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 analysts are forecasting for next year.
Taking into account the latest results, the most recent consensus for Brewin Dolphin Holdings from seven analysts is for revenues of UK£379.6m in 2020, which is a notable 12% increase on its sales over the past 12 months. Earnings per share are expected to expand 19% to UK£0.20. Before this earnings report, analysts had been forecasting revenues of UK£373.7m and earnings per share (EPS) of UK£0.20 in 2020. The consensus analysts don't seem to have seen anything in these results that would have changed their view on the business, given there's been no major change to their estimates.
It will come as no surprise then, to learn that the consensus price target is largely unchanged at UK£3.55. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. The most optimistic Brewin Dolphin Holdings analyst has a price target of UK£4.00 per share, while the most pessimistic values it at UK£2.67. These price targets show that analysts do have some differing views on the business, but the estimates do not vary enough to suggest to us that some are betting on wild success or utter failure.
Zooming out to look at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up both against past performance, and against industry growth estimates. Analysts are definitely expecting Brewin Dolphin Holdings's growth to accelerate, with the forecast 12% growth ranking favourably alongside historical growth of 4.6% per annum over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 6.4% per year. It seems obvious that, while the growth outlook is brighter than the recent past, analysts also expect Brewin Dolphin Holdings to grow faster than the wider market.
The Bottom Line
The most important thing to take away is that there's been no major change in sentiment, with analysts reconfirming that earnings per share are expected to continue performing in line with their prior expectations. Happily, there were no major changes to revenue forecasts, with analysts still expecting the business to grow faster than the wider market. 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.
Even so, the longer term trajectory of the business is much more important for the value creation of shareholders. At Simply Wall St, we have a full range of analyst estimates for Brewin Dolphin Holdings going out to 2022, and you can see them free on our platform here..
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