Cairn Homes plc Just Beat Analyst Forecasts, And Analysts Have Been Updating Their Predictions
Cairn Homes plc (LON:CRN) just released its latest full-year results and things are looking bullish. The company beat both earnings and revenue forecasts, with revenue of €262m, some 6.9% above estimates, and statutory earnings per share (EPS) coming in at €0.017, 29% ahead of expectations. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Cairn Homes after the latest results.
View our latest analysis for Cairn Homes
Taking into account the latest results, the current consensus from Cairn Homes' seven analysts is for revenues of €371.8m in 2021, which would reflect a huge 42% increase on its sales over the past 12 months. Per-share earnings are expected to soar 124% to €0.038. In the lead-up to this report, the analysts had been modelling revenues of €376.5m and earnings per share (EPS) of €0.039 in 2021. The analysts seem to have become a little more negative on the business after the latest results, given the minor downgrade to their earnings per share numbers for next year.
It might be a surprise to learn that the consensus price target was broadly unchanged at €1.21, with the analysts clearly implying that the forecast decline in earnings is not expected to have much of an impact on valuation. 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. Currently, the most bullish analyst values Cairn Homes at €1.12 per share, while the most bearish prices it at €0.78. The narrow spread of estimates could suggest that the business' future is relatively easy to value, or thatthe analysts have a strong view on its prospects.
Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. The period to the end of 2021 brings more of the same, according to the analysts, with revenue forecast to display 42% growth on an annualised basis. That is in line with its 37% annual growth 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 revenues grow 9.2% per year. So although Cairn Homes is expected to maintain its revenue growth rate, it's definitely expected to grow faster than the wider 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. Happily, there were no major changes to revenue forecasts, with the business still expected to grow faster than the wider industry. The consensus price target held steady at €1.21, with the latest estimates not enough to have an impact on their price targets.
Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. At Simply Wall St, we have a full range of analyst estimates for Cairn Homes going out to 2023, and you can see them free on our platform here..
And what about risks? Every company has them, and we've spotted 1 warning sign for Cairn Homes you should know about.
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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