Lendlease Group Earnings Missed Analyst Estimates: Here's What Analysts Are Forecasting Now
Lendlease Group (ASX:LLC) came out with its annual results last week, and we wanted to see how the business is performing and what industry forecasters think of the company following this report. Revenues of AU$10b beat expectations by 8.6%. Unfortunately statutory earnings per share (EPS) fell well short of the mark, turning in a loss of AU$0.34 compared to previous analyst expectations of a profit. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.
See our latest analysis for Lendlease Group
Taking into account the latest results, the most recent consensus for Lendlease Group from nine analysts is for revenues of AU$10.7b in 2024. If met, it would imply a credible 2.9% increase on its revenue over the past 12 months. Lendlease Group is also expected to turn profitable, with statutory earnings of AU$0.81 per share. Before this earnings report, the analysts had been forecasting revenues of AU$11.4b and earnings per share (EPS) of AU$0.74 in 2024. If anything, the analysts look to have become slightly more optimistic overall; while they decreased their revenue forecasts, EPS predictions increased and ultimately earnings are more important.
There's been no real change to the average price target of AU$9.37, with the lower revenue and higher earnings forecasts not expected to meaningfully impact the company's valuation over a longer timeframe. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. There are some variant perceptions on Lendlease Group, with the most bullish analyst valuing it at AU$14.45 and the most bearish at AU$7.05 per share. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the business.
Of course, another way to look at these forecasts is to place them into context against the industry itself. For example, we noticed that Lendlease Group's rate of growth is expected to accelerate meaningfully, with revenues forecast to exhibit 2.9% growth to the end of 2024 on an annualised basis. That is well above its historical decline of 13% a year over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenue grow 11% per year. Although Lendlease Group's revenues are expected to improve, it seems that the analysts are still bearish on the business, forecasting it to grow slower than the broader industry.
The Bottom Line
The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around Lendlease Group's earnings potential next year. Unfortunately, they also downgraded their revenue estimates, and our data indicates underperformance compared to the wider industry. Even so, earnings per share are more important to the intrinsic value of the business. Even so, earnings are more important to the intrinsic value of the business. 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.
With that said, the long-term trajectory of the company's earnings is a lot more important than next year. At Simply Wall St, we have a full range of analyst estimates for Lendlease Group going out to 2026, and you can see them free on our platform here..
You can also see whether Lendlease Group is carrying too much debt, and whether its balance sheet is healthy, 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.
