Boral Limited (ASX:BLD) Just Released Its Half-Yearly Results And Analysts Are Updating Their Estimates

Boral Limited (ASX:BLD) shareholders are probably feeling a little disappointed, since its shares fell 6.5% to AU$5.07 in the week after its latest interim results. 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. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

View our latest analysis for Boral

Following last week's earnings report, Boral's ten analysts are forecasting 2021 revenues to be AU$5.35b, approximately in line with the last 12 months. Boral is also expected to turn profitable, with statutory earnings of AU$0.25 per share. Before this earnings report, the analysts had been forecasting revenues of AU$5.56b and earnings per share (EPS) of AU$0.19 in 2021. Although the analysts have lowered their sales forecasts, they've also made a considerable lift to their earnings per share estimates, which implies there's been something of an uptick in sentiment following the latest results.

There's been no real change to the average price target of AU$5.40, with the lower revenue and higher earnings forecasts not expected to meaningfully impact the company's valuation over a longer timeframe. 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 Boral at AU$6.10 per share, while the most bearish prices it at AU$5.00. 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.

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. These estimates imply that sales are expected to slow, with a forecast revenue decline of 1.1%, a significant reduction from annual growth of 8.9% over the last five years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 6.9% annually for the foreseeable future. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Boral is expected to lag the wider industry.

The Bottom Line

The most important thing here is that the analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards Boral following these results. Unfortunately, they also downgraded their revenue estimates, and our data indicates revenues are expected to perform worse than the wider industry. Even so, earnings per share are more important to the intrinsic value of the business. With that said, earnings are more important to the long-term value of the business. The consensus price target held steady at AU$5.40, with the latest estimates not enough to have an impact on their price targets.

Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. At Simply Wall St, we have a full range of analyst estimates for Boral going out to 2025, and you can see them free on our platform here..

You should always think about risks though. Case in point, we've spotted 2 warning signs for Boral you should be aware of, and 1 of them is a bit unpleasant.

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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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