Here's What Analysts Are Forecasting For RS Group plc (LON:RS1) After Its Yearly Results

There's been a notable change in appetite for RS Group plc (LON:RS1) shares in the week since its annual report, with the stock down 10% to UK£7.41. The result was positive overall - although revenues of UK£2.9b were in line with what the analysts predicted, RS Group surprised by delivering a statutory profit of UK£0.39 per share, modestly greater than expected. 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.

See our latest analysis for RS Group

Taking into account the latest results, the consensus forecast from RS Group's 13 analysts is for revenues of UK£3.01b in 2025. This reflects an okay 2.4% improvement in revenue compared to the last 12 months. Statutory earnings per share are expected to decrease 2.8% to UK£0.38 in the same period. Before this earnings report, the analysts had been forecasting revenues of UK£3.03b and earnings per share (EPS) of UK£0.44 in 2025. So there's definitely been a decline in sentiment after the latest results, noting the substantial drop in new EPS forecasts.

It might be a surprise to learn that the consensus price target was broadly unchanged at UK£8.67, with the analysts clearly implying that the forecast decline in earnings is not expected to have much of an impact on valuation. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. There are some variant perceptions on RS Group, with the most bullish analyst valuing it at UK£9.80 and the most bearish at UK£7.50 per share. Even so, with a relatively close grouping of estimates, it looks like the analysts are quite confident in their valuations, suggesting RS Group is an easy business to forecast or the the analysts are all using similar assumptions.

Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. We would highlight that RS Group's revenue growth is expected to slow, with the forecast 2.4% annualised growth rate until the end of 2025 being well below the historical 12% p.a. growth over the last five years. Compare this to the 24 other companies in this industry with analyst coverage, which are forecast to grow their revenue at 2.4% per year. Factoring in the forecast slowdown in growth, it looks like RS Group is forecast to grow at about the same rate as the wider industry.

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. Happily, there were no real changes to revenue forecasts, with the business still expected to grow in line with the overall industry. The consensus price target held steady at UK£8.67, with the latest estimates not enough to have an impact on their price targets.

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. At Simply Wall St, we have a full range of analyst estimates for RS Group going out to 2027, and you can see them free on our platform here..

You should always think about risks though. Case in point, we've spotted 1 warning sign for RS Group you should be aware 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.