Results: DFI Retail Group Holdings Limited Delivered A Surprise Loss And Now Analysts Have New Forecasts
As you might know, DFI Retail Group Holdings Limited (SGX:D01) recently reported its yearly numbers. Things were not great overall, with a surprise (statutory) loss of US$0.085 per share on revenues of US$9.2b, even though the analysts had been expecting 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. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.
View our latest analysis for DFI Retail Group Holdings
Taking into account the latest results, the most recent consensus for DFI Retail Group Holdings from nine analysts is for revenues of US$9.70b in 2023 which, if met, would be an okay 5.7% increase on its sales over the past 12 months. Earnings are expected to improve, with DFI Retail Group Holdings forecast to report a statutory profit of US$0.15 per share. Before this earnings report, the analysts had been forecasting revenues of US$9.75b and earnings per share (EPS) of US$0.16 in 2023. 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.
Despite cutting their earnings forecasts,the analysts have lifted their price target 8.1% to US$3.23, suggesting that these impacts are not expected to weigh on the stock's value in the long term. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. The most optimistic DFI Retail Group Holdings analyst has a price target of US$3.90 per share, while the most pessimistic values it at US$2.24. 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.
Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. For example, we noticed that DFI Retail Group Holdings' rate of growth is expected to accelerate meaningfully, with revenues forecast to exhibit 5.7% growth to the end of 2023 on an annualised basis. That is well above its historical decline of 6.3% a year over the past five years. Compare this against analyst estimates for the broader industry, which suggest that (in aggregate) industry revenues are expected to grow 8.1% annually for the foreseeable future. Although DFI Retail Group Holdings' 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 most important thing to take away is that the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. On the plus side, there were no major changes to revenue estimates; although forecasts imply revenues will perform worse than the wider industry. We note an upgrade to the price target, suggesting that the analysts believes the intrinsic value of the business is likely to improve over time.
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 estimates - from multiple DFI Retail Group Holdings analysts - going out to 2025, and you can see them free on our platform here.
It is also worth noting that we have found 1 warning sign for DFI Retail Group Holdings that you need to take into consideration.
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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.
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