NatWest Group plc Beat Analyst Estimates: See What The Consensus Is Forecasting For This Year

NatWest Group plc (LON:NWG) just released its latest first-quarter results and things are looking bullish. Results were good overall, with revenues beating analyst predictions by 3.5% to hit UK£3.5b. Statutory earnings per share (EPS) came in at UK£0.10, some 8.8% above whatthe analysts had expected. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.

Check out our latest analysis for NatWest Group

Taking into account the latest results, NatWest Group's 15 analysts currently expect revenues in 2024 to be UK£13.7b, approximately in line with the last 12 months. Statutory earnings per share are forecast to fall 20% to UK£0.39 in the same period. Yet prior to the latest earnings, the analysts had been anticipated revenues of UK£13.6b and earnings per share (EPS) of UK£0.37 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 was unchanged at UK£3.15, implying that the improved earnings outlook is not expected to have a long term impact on value creation for shareholders. 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. Currently, the most bullish analyst values NatWest Group at UK£3.60 per share, while the most bearish prices it at UK£1.40. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the business.

One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. These estimates imply that revenue is expected to slow, with a forecast annualised decline of 0.5% by the end of 2024. This indicates a significant reduction from annual growth of 5.6% over the last five years. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 3.8% per year. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - NatWest Group is expected to lag the wider industry.

The Bottom Line

The most important thing here is that the analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards NatWest Group following these results. On the plus side, there were no major changes to revenue estimates; although forecasts imply they will perform worse 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 NatWest Group analysts - going out to 2026, and you can see them free on our platform here.

You still need to take note of risks, for example - NatWest Group has 2 warning signs (and 1 which is concerning) we think you should know about.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.