Earnings Beat: Clarkson PLC (LON:CKN) Just Beat Analyst Forecasts, And Analysts Have Been Lifting Their Forecasts
It's been a good week for Clarkson PLC (LON:CKN) shareholders, because the company has just released its latest yearly results, and the shares gained 6.6% to UK£34.70. Results overall were respectable, with statutory earnings of UK£1.63 per share roughly in line with what the analysts had forecast. Revenues of UK£443m came in 4.1% ahead of analyst predictions. Earnings are an important time for investors, as they can track a company's performance, look at what the 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 statutory forecasts to see what the analysts are expecting for next year.
View our latest analysis for Clarkson
After the latest results, the five analysts covering Clarkson are now predicting revenues of UK£473.7m in 2022. If met, this would reflect a reasonable 6.9% improvement in sales compared to the last 12 months. Per-share earnings are expected to climb 11% to UK£1.83. In the lead-up to this report, the analysts had been modelling revenues of UK£437.5m and earnings per share (EPS) of UK£1.49 in 2022. So it seems there's been a definite increase in optimism about Clarkson's future following the latest results, with a very substantial lift in the earnings per share forecasts in particular.
Despite these upgrades,the analysts have not made any major changes to their price target of UK£43.71, suggesting that the higher estimates are not likely to have a long term impact on what the stock is worth. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. The most optimistic Clarkson analyst has a price target of UK£49.50 per share, while the most pessimistic values it at UK£36.55. Even so, with a relatively close grouping of estimates, it looks like the analysts are quite confident in their valuations, suggesting Clarkson 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 Clarkson's past performance and to peers in the same industry. It's clear from the latest estimates that Clarkson's rate of growth is expected to accelerate meaningfully, with the forecast 6.9% annualised revenue growth to the end of 2022 noticeably faster than its historical growth of 5.6% p.a. over the past five years. Compare this with other companies in the same industry, which are forecast to see a revenue decline of 2.4% annually. It seems obvious that as part of the brighter growth outlook, Clarkson is expected to grow faster than 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 Clarkson following these results. Fortunately, they also upgraded their revenue estimates, and our data indicates sales are expected to perform better than the wider industry. The consensus price target held steady at UK£43.71, with the latest estimates not enough to have an impact on their price targets.
Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. At Simply Wall St, we have a full range of analyst estimates for Clarkson going out to 2024, and you can see them free on our platform here..
And what about risks? Every company has them, and we've spotted 2 warning signs for Clarkson (of which 1 can't be ignored!) you should know about.
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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.
