Earnings Miss: Ibstock plc Missed EPS By 49% And Analysts Are Revising Their Forecasts
Shareholders might have noticed that Ibstock plc (LON:IBST) filed its annual result this time last week. The early response was not positive, with shares down 9.1% to UK£1.49 in the past week. It looks like a pretty bad result, all things considered. Although revenues of UK£406m were in line with analyst predictions, statutory earnings fell badly short, missing estimates by 49% to hit UK£0.053 per share. 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. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.
See our latest analysis for Ibstock
Following last week's earnings report, Ibstock's eight analysts are forecasting 2024 revenues to be UK£405.7m, approximately in line with the last 12 months. Per-share earnings are expected to jump 38% to UK£0.074. Before this earnings report, the analysts had been forecasting revenues of UK£424.9m and earnings per share (EPS) of UK£0.08 in 2024. The analysts are less bullish than they were before these results, given the reduced revenue forecasts and the minor downgrade to earnings per share expectations.
The analysts made no major changes to their price target of UK£1.61, suggesting the downgrades are not expected to have a long-term impact on Ibstock's valuation. 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. There are some variant perceptions on Ibstock, with the most bullish analyst valuing it at UK£2.00 and the most bearish at UK£1.35 per share. There are definitely some different views on the stock, but the range of estimates is not wide enough as to imply that the situation is unforecastable, in our view.
Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. We would highlight that revenue is expected to reverse, with a forecast 0.03% annualised decline to the end of 2024. That is a notable change from historical growth of 5.0% 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 6.2% annually for the foreseeable future. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Ibstock is expected to lag the wider industry.
The Bottom Line
The most important thing to take away is that the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. On the negative side, they also downgraded their revenue estimates, and forecasts imply they will 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 Ibstock going out to 2026, and you can see them free on our platform here..
Even so, be aware that Ibstock is showing 2 warning signs in our investment analysis , and 1 of those can't be ignored...
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
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.
