Earnings Miss: Marston's PLC Missed EPS And Analysts Are Revising Their Forecasts

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Investors in Marston's PLC (LON:MARS) had a good week, as its shares rose 8.2% to close at UK£0.34 following the release of its yearly results. Revenues came in at UK£872m, in line with estimates, while Marston's reported a statutory loss of UK£0.015 per share, well short of prior analyst forecasts for a profit. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. 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 Marston's

LSE:MARS Earnings and Revenue Growth December 24th 2023

Taking into account the latest results, the most recent consensus for Marston's from eight analysts is for revenues of UK£907.5m in 2024. If met, it would imply a satisfactory 4.0% increase on its revenue over the past 12 months. Marston's is also expected to turn profitable, with statutory earnings of UK£0.072 per share. Before this earnings report, the analysts had been forecasting revenues of UK£908.5m and earnings per share (EPS) of UK£0.074 in 2024. 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.

There were no changes to revenue or earnings estimates or the price target of UK£0.49, suggesting that the company has met expectations in its recent result. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. The most optimistic Marston's analyst has a price target of UK£0.75 per share, while the most pessimistic values it at UK£0.27. Note the wide gap in analyst price targets? This implies to us that there is a fairly broad range of possible scenarios for the underlying business.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Marston's' past performance and to peers in the same industry. For example, we noticed that Marston's' rate of growth is expected to accelerate meaningfully, with revenues forecast to exhibit 4.0% growth to the end of 2024 on an annualised basis. That is well above its historical decline of 7.3% a year over the past five years. Compare this against analyst estimates for the broader industry, which suggest that (in aggregate) industry revenues are expected to grow 7.5% annually for the foreseeable future. So although Marston's' revenue growth is expected to improve, it is still expected to grow slower than the industry.

The Bottom Line

The most obvious conclusion is that there's been no major change in the business' prospects in recent times, with the analysts holding their earnings forecasts steady, in line with previous estimates. On the plus side, there were no major changes to revenue estimates; although forecasts imply they will perform worse than the wider industry. The consensus price target held steady at UK£0.49, with the latest estimates not enough to have an impact on their price targets.

With that in mind, we wouldn't be too quick to come to a conclusion on Marston's. Long-term earnings power is much more important than next year's profits. We have estimates - from multiple Marston's analysts - going out to 2026, and you can see them free on our platform here.

It might also be worth considering whether Marston's' debt load is appropriate, using our debt analysis tools on the Simply Wall St platform, here.

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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.