Seven West Media Limited Beat Analyst Estimates: See What The Consensus Is Forecasting For This Year

It's been a sad week for Seven West Media Limited (ASX:SWM), who've watched their investment drop 15% to AU$0.44 in the week since the company reported its annual result. Revenues were AU$1.3b, approximately in line with whatthe analysts expected, although statutory earnings per share (EPS) crushed expectations, coming in at AU$0.21, an impressive 123% ahead of estimates. 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. 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 Seven West Media

After the latest results, the ten analysts covering Seven West Media are now predicting revenues of AU$1.40b in 2022. If met, this would reflect a notable 11% improvement in sales compared to the last 12 months. Statutory earnings per share are expected to plummet 56% to AU$0.092 in the same period. Before this earnings report, the analysts had been forecasting revenues of AU$1.36b and earnings per share (EPS) of AU$0.092 in 2022. 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.

It may not be a surprise to see thatthe analysts have reconfirmed their price target of AU$0.62, implying that the uplift in sales is not expected to greatly contribute to Seven West Media's valuation in the near term. 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 Seven West Media at AU$0.80 per share, while the most bearish prices it at AU$0.49. 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 Seven West Media shareholders.

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. For example, we noticed that Seven West Media's rate of growth is expected to accelerate meaningfully, with revenues forecast to exhibit 11% growth to the end of 2022 on an annualised basis. That is well above its historical decline of 8.1% a year over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in the industry are forecast to see their revenue grow 5.8% per year. Not only are Seven West Media's revenues expected to improve, it seems that the analysts are also expecting it to grow faster than the wider 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. Happily, they also upgraded their revenue estimates, and are forecasting revenues 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.

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 Seven West Media going out to 2024, and you can see them free on our platform here..

However, before you get too enthused, we've discovered 3 warning signs for Seven West Media (2 are potentially serious!) that you should be aware of.

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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.
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