Costain Group PLC Just Beat Analyst Forecasts, And Analysts Have Been Updating Their Predictions

Last week, you might have seen that Costain Group PLC (LON:COST) released its full-year result to the market. The early response was not positive, with shares down 5.9% to UK£0.64 in the past week. It looks to have been a decent result overall - while revenue fell marginally short of analyst estimates at UK£1.3b, statutory earnings beat expectations by a notable 17%, coming in at UK£0.078 per share. 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 Costain Group

Taking into account the latest results, the twin analysts covering Costain Group provided consensus estimates of UK£1.28b revenue in 2024, which would reflect a measurable 3.8% decline over the past 12 months. Statutory earnings per share are predicted to soar 29% to UK£0.10. In the lead-up to this report, the analysts had been modelling revenues of UK£1.32b and earnings per share (EPS) of UK£0.09 in 2024. Although the analysts have lowered their revenue forecasts, they've also made a nice increase in their earnings per share estimates, which implies there's been something of an uptick in sentiment following the latest results.

There's been a 5.0% lift in the price target to UK£0.89, with the analysts signalling that the higher earnings forecasts are more relevant to the business than the weaker revenue estimates.

Of course, another way to look at these forecasts is to place them into context against the industry itself. These estimates imply that revenue is expected to slow, with a forecast annualised decline of 3.8% by the end of 2024. This indicates a significant reduction from annual growth of 2.4% over the last five years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 3.1% annually for the foreseeable future. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Costain 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 Costain Group following these results. On the negative side, they also downgraded their revenue estimates, and forecasts imply they will perform worse than the wider industry. With that said, earnings are more important to the long-term value of the business. There was also a nice increase in the price target, with the analysts clearly feeling that the intrinsic value of the business is improving.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have analyst estimates for Costain Group going out as far as 2026, and you can see them free on our platform here.

Before you take the next step you should know about the 2 warning signs for Costain Group that we have uncovered.

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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.