The analysts covering McCarthy & Stone plc (LON:MCS) delivered a dose of negativity to shareholders today, by making a substantial revision to their statutory forecasts for this year. This report focused on revenue estimates, and it looks as though the consensus view of the business has become substantially more conservative.
After the downgrade, the consensus from McCarthy & Stone's seven analysts is for revenues of UK£272m in 2020, which would reflect a disturbing 56% decline in sales compared to the last year of performance. Prior to the latest estimates, the analysts were forecasting revenues of UK£390m in 2020. The consensus view seems to have become more pessimistic on McCarthy & Stone, noting the pretty serious reduction to revenue estimates in this update.
These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the McCarthy & Stone's past performance and to peers in the same industry. These estimates imply that sales are expected to slow, with a forecast revenue decline of 56%, a significant reduction from annual growth of 9.5% over the last five years. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 4.7% next year. It's pretty clear that McCarthy & Stone's revenues are expected to perform substantially worse than the wider industry.
The Bottom Line
The clear low-light was that analysts slashing their revenue forecasts for McCarthy & Stone this year. They're also anticipating slower revenue growth than the wider market. Often, one downgrade can set off a daisy-chain of cuts, especially if an industry is in decline. So we wouldn't be surprised if the market became a lot more cautious on McCarthy & Stone after today.
Need some more information? We have estimates for McCarthy & Stone from its seven analysts out until 2023, and you can see them free on our platform here.
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This article by Simply Wall St is general in nature. 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.
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