Cranswick plc (LON:CWK) shares fell 3.0% to UK£31.30 in the week since its latest half-year results. Revenues of UK£770m were in line with forecasts, although earnings per share (EPS) came in below expectations at UK£1.35, missing estimates by 3.8%. Earnings are an important time for investors, as they can track a company's performance, look at what top analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. With this in mind, we've gathered the latest forecasts to see what analysts are expecting for next year.
After the latest results, the ten analysts covering Cranswick are now predicting revenues of UK£1.60b in 2020. If met, this would reflect a satisfactory 7.7% improvement in sales compared to the last 12 months. Earnings per share are expected to dip 3.3% to UK£1.37 in the same period. Yet prior to the latest earnings, analysts had been forecasting revenues of UK£1.59b and earnings per share (EPS) of UK£1.35 in 2020. So it's pretty clear that, although analysts have updated their estimates, there's been no major change in expectations for the business following the latest results.
There were no changes to revenue or earnings estimates or the price target of UK£32.06, suggesting that the company has met expectations in its recent result. 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 Cranswick at UK£35.00 per share, while the most bearish prices it at UK£30.00. The narrow spread of estimates could suggest that the business' future is relatively easy to value, or that analysts have a clear view on its prospects.
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. We would highlight that Cranswick's revenue growth is expected to slow, with forecast 7.7% increase next year well below the historical 10%p.a. growth over the last five years. By way of comparison, other companies in this market with analyst coverage, are forecast to grow their revenue at 4.1% next year. Even after the forecast slowdown in growth, it seems obvious that analysts still thinkCranswick will 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. The consensus price target held steady at UK£32.06, with the latest estimates not enough to have an impact on analysts' estimated valuations.
Still, the long-term prospects of the business are much more relevant than next year's earnings. We have estimates - from multiple Cranswick analysts - going out to 2023, and you can see them free on our platform here.
You can also see whether Cranswick is carrying too much debt, and whether its balance sheet is healthy, for free on our platform here.
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