There's been a notable change in appetite for Taylor Wimpey plc (LON:TW.) shares in the week since its annual report, with the stock down 11% to UK£2.05. It was a credible result overall, with revenues of UK£4.3b and statutory earnings per share of UK£0.21 both in line with analyst estimates, showing that Taylor Wimpey is executing in line with expectations. 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 analysts' statutory forecasts suggest is in store for next year.
Following last week's earnings report, Taylor Wimpey's 15 analysts are forecasting 2020 revenues to be UK£4.37b, approximately in line with the last 12 months. Statutory per-share earnings are expected to be UK£0.21, roughly flat on the last 12 months. In the lead-up to this report, analysts had been modelling revenues of UK£4.41b and earnings per share (EPS) of UK£0.21 in 2020. The consensus analysts don't seem to have seen anything in these results that would have changed their view on the business, given there's been no major change to their estimates.
There were no changes to revenue or earnings estimates or the price target of UK£2.28, suggesting that the company has met expectations in its recent result. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. Currently, the most bullish analyst values Taylor Wimpey at UK£2.70 per share, while the most bearish prices it at UK£1.60. Analysts definitely have varying views on the business, but the spread of estimates is not wide enough in our view to suggest that extreme outcomes could await Taylor Wimpey shareholders.
In addition, we can look to Taylor Wimpey's past performance and see whether business is expected to improve, and if the company is expected to perform better than wider market. It's pretty clear that analysts expect Taylor Wimpey's revenue growth will slow down substantially, with revenues next year expected to grow 0.7%, compared to a historical growth rate of 8.9% over the past five years. By way of comparison, other companies in this market with analyst coverage, are forecast to grow their revenue at 5.2% per year. So it's pretty clear that, while revenue growth is expected to slow down, analysts still expect the wider market to grow faster than Taylor Wimpey.
The Bottom Line
The most obvious conclusion from these results is that there's been no major change in the business' prospects in recent times, with analysts holding earnings per share steady, in line with previous estimates. On the plus side, there were no major changes to revenue estimates; although analyst forecasts imply revenues will perform worse than the wider market. 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. We have forecasts for Taylor Wimpey going out to 2023, and you can see them free on our platform here.
We also provide an overview of the Taylor Wimpey Board and CEO remuneration and length of tenure at the company, and whether insiders have been buying the stock, here.
If you spot an error that warrants correction, please contact the editor at email@example.com. 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. Simply Wall St has no position in the stocks mentioned.
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