Here's What Analysts Are Forecasting For Taylor Wimpey plc (LON:TW.) After Its Annual Results
Last week, you might have seen that Taylor Wimpey plc (LON:TW.) released its annual result to the market. The early response was not positive, with shares down 5.6% to UK£1.38 in the past week. Taylor Wimpey reported UK£3.5b in revenue, roughly in line with analyst forecasts, although statutory earnings per share (EPS) of UK£0.099 beat expectations, being 3.6% higher than what the analysts expected. 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. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.
Check out our latest analysis for Taylor Wimpey
Taking into account the latest results, the current consensus, from the 13 analysts covering Taylor Wimpey, is for revenues of UK£3.42b in 2024. This implies a measurable 2.7% reduction in Taylor Wimpey's revenue over the past 12 months. Statutory earnings per share are forecast to sink 15% to UK£0.084 in the same period. Before this earnings report, the analysts had been forecasting revenues of UK£3.46b and earnings per share (EPS) of UK£0.091 in 2024. The analysts seem to have become a little more negative on the business after the latest results, given the small dip in their earnings per share numbers for next year.
It might be a surprise to learn that the consensus price target was broadly unchanged at UK£1.54, with the analysts clearly implying that the forecast decline in earnings is not expected to have much of an impact on 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. Currently, the most bullish analyst values Taylor Wimpey at UK£1.90 per share, while the most bearish prices it at UK£1.01. These price targets show that analysts do have some differing views on the business, but the estimates do not vary enough to suggest to us that some are betting on wild success or utter failure.
These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Taylor Wimpey's past performance and to peers in the same industry. These estimates imply that revenue is expected to slow, with a forecast annualised decline of 2.7% by the end of 2024. This indicates a significant reduction from annual growth of 0.4% 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 4.6% annually for the foreseeable future. It's pretty clear that Taylor Wimpey's revenues are expected to perform substantially worse than the wider industry.
The Bottom Line
The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Taylor Wimpey. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting that it's tracking in line with expectations. Although our data does suggest that Taylor Wimpey's revenue is 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.
Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have forecasts for Taylor Wimpey going out to 2026, and you can see them free on our platform here.
You should always think about risks though. Case in point, we've spotted 2 warning signs for Taylor Wimpey you should be aware of, and 1 of them is concerning.
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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.
