JB Hi-Fi Limited Beat Analyst Estimates: See What The Consensus Is Forecasting For This Year

Shareholders of JB Hi-Fi Limited (ASX:JBH) will be pleased this week, given that the stock price is up 10% to AU$61.79 following its latest half-year results. The result was positive overall - although revenues of AU$5.2b were in line with what the analysts predicted, JB Hi-Fi surprised by delivering a statutory profit of AU$2.41 per share, modestly greater than expected. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on JB Hi-Fi after the latest results.

See our latest analysis for JB Hi-Fi

Taking into account the latest results, JB Hi-Fi's 14 analysts currently expect revenues in 2024 to be AU$9.54b, approximately in line with the last 12 months. Statutory earnings per share are expected to dip 8.0% to AU$3.86 in the same period. Before this earnings report, the analysts had been forecasting revenues of AU$9.36b and earnings per share (EPS) of AU$3.54 in 2024. The analysts seems to have become more bullish on the business, judging by their new earnings per share estimates.

The consensus price target rose 16% to AU$57.36, suggesting that higher earnings estimates flow through to the stock's valuation as well. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. There are some variant perceptions on JB Hi-Fi, with the most bullish analyst valuing it at AU$70.00 and the most bearish at AU$37.50 per share. 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.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the JB Hi-Fi's past performance and to peers in the same industry. We would highlight that JB Hi-Fi's revenue growth is expected to slow, with the forecast 0.7% annualised growth rate until the end of 2024 being well below the historical 7.0% p.a. growth over the last five years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 7.0% annually. Factoring in the forecast slowdown in growth, it seems obvious that JB Hi-Fi is also expected to grow slower than other industry participants.

The Bottom Line

The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around JB Hi-Fi's earnings potential next year. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting that it's tracking in line with expectations. Although our data does suggest that JB Hi-Fi's revenue is expected to perform worse than the wider industry. We note an upgrade to the price target, suggesting that the analysts believes the intrinsic value of the business is likely to improve over time.

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. We have forecasts for JB Hi-Fi 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 2 warning signs for JB Hi-Fi (of which 1 is a bit concerning!) 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.