Today is shaping up negative for Senior plc (LON:SNR) shareholders, with the analysts delivering a substantial negative revision to this year's forecasts. Both revenue and earnings per share (EPS) forecasts went under the knife, suggesting analysts have soured majorly on the business.
After the downgrade, the consensus from Senior's four analysts is for revenues of UK£833m in 2025, which would reflect a chunky 16% decline in sales compared to the last year of performance. Statutory earnings per share are anticipated to descend 11% to UK£0.068 in the same period. Previously, the analysts had been modelling revenues of UK£1.1b and earnings per share (EPS) of UK£0.092 in 2025. It looks like analyst sentiment has declined substantially, with a sizeable cut to revenue estimates and a pretty serious decline to earnings per share numbers as well.
Check out our latest analysis for Senior
What's most unexpected is that the consensus price target rose 13% to UK£2.24, strongly implying the downgrade to forecasts is not expected to be more than a temporary blip.
These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Senior's past performance and to peers in the same industry. We would highlight that sales are expected to reverse, with a forecast 29% annualised revenue decline to the end of 2025. That is a notable change from historical growth of 6.0% 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 7.3% annually for the foreseeable future. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Senior is expected to lag the wider industry.
The Bottom Line
The most important thing to take away is that analysts cut their earnings per share estimates, expecting a clear decline in business conditions. Unfortunately analysts also downgraded their revenue estimates, and industry data suggests that Senior's revenues are expected to grow slower than the wider market. The increasing price target is not intuitively what we would expect to see, given these downgrades, and we'd suggest shareholders revisit their investment thesis before making a decision.
Still, the long-term prospects of the business are much more relevant than next year's earnings. We have estimates - from multiple Senior analysts - going out to 2027, and you can see them free on our platform here.
Of course, seeing company management invest large sums of money in a stock can be just as useful as knowing whether analysts are downgrading their estimates. So you may also wish to search this free list of stocks with high insider ownership.
Valuation is complex, but we're here to simplify it.
Discover if Senior might be undervalued or overvalued with our detailed analysis, featuring fair value estimates, potential risks, dividends, insider trades, and its financial condition.
Access Free AnalysisHave 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.