The Lendlease Group (ASX:LLC) Analysts Have Been Trimming Their Sales Forecasts

Market forces rained on the parade of Lendlease Group (ASX:LLC) shareholders today, when the analysts downgraded their forecasts for this year. Revenue estimates were cut sharply as the analysts signalled a weaker outlook - perhaps a sign that investors should temper their expectations as well.

Following the downgrade, the consensus from ten analysts covering Lendlease Group is for revenues of AU$9.2b in 2022, implying a noticeable 3.9% decline in sales compared to the last 12 months. Prior to the latest estimates, the analysts were forecasting revenues of AU$10b in 2022. It looks like forecasts have become a fair bit less optimistic on Lendlease Group, given the measurable cut to revenue estimates.

View our latest analysis for Lendlease Group

There was no particular change to the consensus price target of AU$12.29, with Lendlease Group's latest outlook seemingly not enough to result in a change of valuation. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. The most optimistic Lendlease Group analyst has a price target of AU$14.45 per share, while the most pessimistic values it at AU$10.06. 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.

Of course, another way to look at these forecasts is to place them into context against the industry itself. One thing that stands out from these estimates is that shrinking revenues are expected to moderate over the period ending 2022 compared to the historical decline of 12% per annum over the past five years. Compare this against analyst estimates for companies in the broader industry, which suggest that revenues (in aggregate) are expected to grow 5.1% annually. So while a broad number of companies are forecast to grow, unfortunately Lendlease Group is expected to see its sales affected worse than other companies in the industry.

The Bottom Line

The most important thing to take away is that analysts cut their revenue estimates for this year. They're also anticipating slower revenue growth than the wider market. Given the stark change in sentiment, we'd understand if investors became more cautious on Lendlease Group after today.

Hungry for more information? We have estimates for Lendlease Group from its ten analysts out until 2024, and you can see them free on our platform here.

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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.