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Cushman & Wakefield plc (NYSE:CWK) shareholders are probably feeling a little disappointed, since its shares fell 4.1% to US$15.48 in the week after its latest yearly results. Revenues were in line with expectations, at US$7.8b, while statutory losses ballooned to US$1.00 per share. 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. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Cushman & Wakefield after the latest results.
Taking into account the latest results, the most recent consensus for Cushman & Wakefield from seven analysts is for revenues of US$8.23b in 2021 which, if met, would be a modest 5.0% increase on its sales over the past 12 months. Earnings are expected to improve, with Cushman & Wakefield forecast to report a statutory profit of US$0.52 per share. In the lead-up to this report, the analysts had been modelling revenues of US$8.23b and earnings per share (EPS) of US$0.51 in 2021. So it's pretty clear that, although the analysts have updated their estimates, there's been no major change in expectations for the business following the latest results.
It will come as no surprise then, to learn that the consensus price target is largely unchanged at US$16.75. 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. Currently, the most bullish analyst values Cushman & Wakefield at US$20.00 per share, while the most bearish prices it at US$15.00. Even so, with a relatively close grouping of estimates, it looks like the analysts are quite confident in their valuations, suggesting Cushman & Wakefield is an easy business to forecast or the the analysts are all using similar assumptions.
These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Cushman & Wakefield's past performance and to peers in the same industry. We would highlight that Cushman & Wakefield's revenue growth is expected to slow, with forecast 5.0% increase next year well below the historical 9.6%p.a. growth over the last five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 15% per year. So it's pretty clear that, while revenue growth is expected to slow down, the wider industry is also expected to grow faster than Cushman & Wakefield.
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. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting sales are tracking in line with expectations - although our data does suggest that Cushman & Wakefield'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.
With that in mind, we wouldn't be too quick to come to a conclusion on Cushman & Wakefield. Long-term earnings power is much more important than next year's profits. We have estimates - from multiple Cushman & Wakefield analysts - going out to 2024, and you can see them free on our platform here.
You can also see whether Cushman & Wakefield is carrying too much debt, and whether its balance sheet is healthy, for free on our platform here.
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.
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