Genus plc (LON:GNS) Just Reported Earnings, And Analysts Cut Their Target Price
It's been a good week for Genus plc (LON:GNS) shareholders, because the company has just released its latest half-yearly results, and the shares gained 9.7% to UK£19.59. Revenues came in 3.6% below expectations, at UK£334m. Statutory earnings per share were relatively better off, with a per-share profit of UK£0.51 being roughly in line with analyst estimates. 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. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.
Check out our latest analysis for Genus
Taking into account the latest results, Genus' five analysts currently expect revenues in 2024 to be UK£675.3m, approximately in line with the last 12 months. Statutory earnings per share are forecast to crater 34% to UK£0.34 in the same period. Before this earnings report, the analysts had been forecasting revenues of UK£689.2m and earnings per share (EPS) of UK£0.47 in 2024. The analysts seem less optimistic after the recent results, reducing their revenue forecasts and making a large cut to earnings per share numbers.
It'll come as no surprise then, to learn that the analysts have cut their price target 5.7% to UK£31.20. 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 Genus analyst has a price target of UK£35.00 per share, while the most pessimistic values it at UK£25.00. Analysts definitely have varying views on the business, but the spread of estimates is not wide enough in our view to suggest that extreme outcomes could await Genus shareholders.
Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. We would highlight that Genus' revenue growth is expected to slow, with the forecast 0.7% annualised growth rate until the end of 2024 being well below the historical 7.4% 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 21% per year. Factoring in the forecast slowdown in growth, it seems obvious that Genus is also expected to grow slower than other industry participants.
The Bottom Line
The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Genus. On the negative side, they also downgraded their revenue estimates, and forecasts imply they will perform worse than the wider industry. The consensus price target fell measurably, with the analysts seemingly not reassured by the latest results, leading to a lower estimate of Genus' future valuation.
With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have forecasts for Genus going out to 2026, and you can see them free on our platform here.
You can also view our analysis of Genus' balance sheet, and whether we think Genus is carrying too much debt, for free on our 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.
