There's been a notable change in appetite for Macfarlane Group PLC (LON:MACF) shares in the week since its full-year report, with the stock down 16% to UK£0.94. It was an okay report, and revenues came in at UK£225m, approximately in line with analyst estimates leading up to the results announcement. Earnings are an important time for investors, as they can track a company's performance, look at what top analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. We thought readers would find it interesting to see analysts' latest (statutory) post-earnings forecasts for next year.
Taking into account the latest results, the most recent consensus for Macfarlane Group from one analyst is for revenues of UK£235.7m in 2020, which is a reasonable 4.6% increase on its sales over the past 12 months. Prior to the latest earnings, analysts were forecasting revenues of UK£236.8m in 2020, and did not provide an EPS estimate. It looks like the latest results have met analyst expectations and confirmed that the business is performing in line with expectations, given there's been no real changes in the new revenue estimates.
Another way to assess these estimates is by comparing them to past performance, and seeing whether analysts are more or less bullish relative to other companies in the market. It's pretty clear that analysts expect Macfarlane Group's revenue growth will slow down substantially, with revenues next year expected to grow 4.6%, compared to a historical growth rate of 8.0% over the past five years. Compare this to the other companies in this market with analyst coverage, which are forecast to grow their revenue at 4.7% per year. So it's pretty clear that, while Macfarlane Group's revenue growth is expected to slow, it's expected to grow roughly in line with the industry.
The Bottom Line
The biggest takeaway for us from these new estimates is the bullish forecast for profits next year. They also reconfirmed their revenue estimates, with the company predicted to grow at about the same rate as the wider market. There is currently no consensus price target from the analysts we track, but we note that the market disliked the latest results, with the share price falling -16% in the past week.
One Macfarlane Group broker/analyst has provided estimates out to 2021, which can be seen for free on our platform here.
You can also view our analysis of Macfarlane Group's balance sheet, and whether we think Macfarlane Group is carrying too much debt, for free on our platform here.
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