Close Brothers Group plc (LON:CBG) Just Released Its Yearly Results And Analysts Are Updating Their Estimates

Close Brothers Group plc (LON:CBG) just released its latest annual report and things are not looking great. Close Brothers Group missed analyst forecasts, with revenues of UK£905m and statutory earnings per share (EPS) of UK£1.10, falling short by 4.0% and 2.7% respectively. 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.

View our latest analysis for Close Brothers Group

Taking into account the latest results, the most recent consensus for Close Brothers Group from ten analysts is for revenues of UK£968.8m in 2023 which, if met, would be a modest 7.1% increase on its sales over the past 12 months. Per-share earnings are expected to accumulate 3.9% to UK£1.15. Yet prior to the latest earnings, the analysts had been anticipated revenues of UK£969.9m and earnings per share (EPS) of UK£1.24 in 2023. The analysts seem to have become a little more negative on the business after the latest results, given the minor downgrade to their earnings per share numbers for next year.

The consensus price target held steady at UK£12.49, with the analysts seemingly voting that their lower forecast earnings are not expected to lead to a lower stock price in the foreseeable future. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. Currently, the most bullish analyst values Close Brothers Group at UK£14.88 per share, while the most bearish prices it at UK£9.40. 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 Close Brothers Group shareholders.

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. It's clear from the latest estimates that Close Brothers Group's rate of growth is expected to accelerate meaningfully, with the forecast 7.1% annualised revenue growth to the end of 2023 noticeably faster than its historical growth of 3.5% p.a. over the past five years. Other similar companies in the industry (with analyst coverage) are also forecast to grow their revenue at 5.8% per year. Close Brothers Group is expected to grow at about the same rate as its industry, so it's not clear that we can draw any conclusions from its growth relative to competitors.

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. They also reconfirmed their revenue estimates, with the company predicted to grow at about the same rate as 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.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have forecasts for Close Brothers Group going out to 2025, and you can see them free on our platform here.

We don't want to rain on the parade too much, but we did also find 1 warning sign for Close Brothers Group that you need to be mindful 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.