oOh!media Limited (ASX:OML) Just Reported Earnings, And Analysts Cut Their Target Price

oOh!media Limited (ASX:OML) shareholders are probably feeling a little disappointed, since its shares fell 8.6% to AU$1.33 in the week after its latest half-year results. Revenues came in 4.2% below expectations, at AU$288m. Statutory earnings per share were relatively better off, with a per-share profit of AU$0.063 being roughly in line with analyst estimates. 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. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.

Check out our latest analysis for oOh!media

Following the latest results, oOh!media's nine analysts are now forecasting revenues of AU$642.0m in 2024. This would be a satisfactory 2.6% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to climb 14% to AU$0.072. Before this earnings report, the analysts had been forecasting revenues of AU$662.7m and earnings per share (EPS) of AU$0.088 in 2024. The analysts seem less optimistic after the recent results, reducing their revenue forecasts and making a substantial drop in earnings per share numbers.

The consensus price target fell 7.4% to AU$1.68, with the weaker earnings outlook clearly leading valuation estimates. 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. The most optimistic oOh!media analyst has a price target of AU$1.90 per share, while the most pessimistic values it at AU$1.50. With such a narrow range of valuations, the analysts apparently share similar views on what they think the business is worth.

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 oOh!media's growth to accelerate, with the forecast 5.3% annualised growth to the end of 2024 ranking favourably alongside historical growth of 2.3% per annum over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 1.8% per year. Factoring in the forecast acceleration in revenue, it's pretty clear that oOh!media is expected to grow much faster than its 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. Regrettably, they also downgraded their revenue estimates, but the latest forecasts still imply the business will grow faster than the wider industry. Furthermore, the analysts also cut their price targets, suggesting that the latest news has led to greater pessimism about the intrinsic value of the business.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have estimates - from multiple oOh!media analysts - going out to 2026, 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 oOh!media you should know about.

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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.