JTC PLC Just Missed Earnings - But Analysts Have Updated Their Models
Shareholders might have noticed that JTC PLC (LON:JTC) filed its full-year result this time last week. The early response was not positive, with shares down 2.2% to UK£6.21 in the past week. It looks like a pretty bad result, all things considered. Although revenues of UK£115m were in line with analyst predictions, statutory earnings fell badly short, missing estimates by 51% to hit UK£0.09 per share. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.
View our latest analysis for JTC
Taking into account the latest results, the consensus forecast from JTC's six analysts is for revenues of UK£147.7m in 2021, which would reflect a huge 28% improvement in sales compared to the last 12 months. Per-share earnings are expected to leap 163% to UK£0.24. Yet prior to the latest earnings, the analysts had been anticipated revenues of UK£143.4m and earnings per share (EPS) of UK£0.24 in 2021. So it looks like there's been no major change in sentiment following the latest results, although the analysts have made a modest lift to to revenue forecasts.
Even though revenue forecasts increased, there was no change to the consensus price target of UK£6.98, suggesting the analysts are focused on earnings as the driver of value creation. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. The most optimistic JTC analyst has a price target of UK£7.65 per share, while the most pessimistic values it at UK£4.75. There are definitely some different views on the stock, but the range of estimates is not wide enough as to imply that the situation is unforecastable, in our view.
One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. The analysts are definitely expecting JTC's growth to accelerate, with the forecast 28% annualised growth to the end of 2021 ranking favourably alongside historical growth of 20% per annum over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 1.3% annually. Factoring in the forecast acceleration in revenue, it's pretty clear that JTC is expected to grow much faster than its industry.
The Bottom Line
The most obvious conclusion is that there's been no major change in the business' prospects in recent times, with the analysts holding their earnings forecasts steady, in line with previous estimates. Pleasantly, they also upgraded their revenue estimates, and their forecasts suggest the business is expected to grow faster than the wider industry. 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 in mind, we wouldn't be too quick to come to a conclusion on JTC. Long-term earnings power is much more important than next year's profits. We have forecasts for JTC going out to 2024, and you can see them free on our platform here.
It is also worth noting that we have found 4 warning signs for JTC that you need to take into consideration.
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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