Brookfield Asset Management Ltd. Recorded A 15% Miss On Revenue: Analysts Are Revisiting Their Models

It's shaping up to be a tough period for Brookfield Asset Management Ltd. (TSE:BAM), which a week ago released some disappointing second-quarter results that could have a notable impact on how the market views the stock. Brookfield Asset Management reported an earnings miss, with US$1.1b revenues falling 15% short of analyst models, and statutory earnings per share (EPS) of US$0.38 also coming in slightly below expectations. 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. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Brookfield Asset Management after the latest results.

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Taking into account the latest results, the consensus forecast from Brookfield Asset Management's 14 analysts is for revenues of US$5.25b in 2025. This reflects a sizeable 21% improvement in revenue compared to the last 12 months. Per-share earnings are expected to step up 19% to US$1.80. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$5.28b and earnings per share (EPS) of US$1.80 in 2025. So it's pretty clear that, although the analysts have updated their estimates, there's been no major change in expectations for the business following the latest results.

View our latest analysis for Brookfield Asset Management

The analysts reconfirmed their price target of CA$78.96, showing that the business is executing well and in line with expectations. 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. The most optimistic Brookfield Asset Management analyst has a price target of CA$97.59 per share, while the most pessimistic values it at CA$44.07. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the business.

Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. The analysts are definitely expecting Brookfield Asset Management's growth to accelerate, with the forecast 46% annualised growth to the end of 2025 ranking favourably alongside historical growth of 6.7% per annum over the past three years. Compare this with other companies in the same industry, which are forecast to grow their revenue 13% annually. Factoring in the forecast acceleration in revenue, it's pretty clear that Brookfield Asset Management is expected to grow much faster than its industry.

The Bottom Line

The most important thing to take away is that there's been no major change in sentiment, with the analysts reconfirming that the business is performing in line with their previous earnings per share estimates. Happily, there were no major changes to revenue forecasts, with the business still expected 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. We have estimates - from multiple Brookfield Asset Management analysts - going out to 2027, and you can see them free on our platform here.

Even so, be aware that Brookfield Asset Management is showing 2 warning signs in our investment analysis , 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.