Barratt Redrow plc Earnings Missed Analyst Estimates: Here's What Analysts Are Forecasting Now

Investors in Barratt Redrow plc (LON:BTRW) had a good week, as its shares rose 2.0% to close at UK£3.76 following the release of its annual results. It looks like a pretty bad result, all things considered. Although revenues of UK£5.6b were in line with analyst predictions, statutory earnings fell badly short, missing estimates by 30% to hit UK£0.13 per share. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.

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Following the latest results, Barratt Redrow's 15 analysts are now forecasting revenues of UK£5.95b in 2026. This would be a modest 6.6% improvement in revenue compared to the last 12 months. Per-share earnings are expected to shoot up 115% to UK£0.28. Yet prior to the latest earnings, the analysts had been anticipated revenues of UK£5.96b and earnings per share (EPS) of UK£0.29 in 2026. So it looks like there's been a small decline in overall sentiment after the recent results - there's been no major change to revenue estimates, but the analysts did make a small dip in their earnings per share forecasts.

See our latest analysis for Barratt Redrow

It might be a surprise to learn that the consensus price target was broadly unchanged at UK£5.21, with the analysts clearly implying that the forecast decline in earnings is not expected to have much of an impact on valuation. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. There are some variant perceptions on Barratt Redrow, with the most bullish analyst valuing it at UK£6.40 and the most bearish at UK£4.40 per share. 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 Barratt Redrow shareholders.

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. It's clear from the latest estimates that Barratt Redrow's rate of growth is expected to accelerate meaningfully, with the forecast 6.6% annualised revenue growth to the end of 2026 noticeably faster than its historical growth of 4.2% p.a. over the past five years. Other similar companies in the industry (with analyst coverage) are also forecast to grow their revenue at 6.1% per year. Factoring in the forecast acceleration in revenue, it's pretty clear that Barratt Redrow is expected to grow at about the same rate as the wider industry.

The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Barratt Redrow. 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 in mind, we wouldn't be too quick to come to a conclusion on Barratt Redrow. Long-term earnings power is much more important than next year's profits. We have forecasts for Barratt Redrow going out to 2028, and you can see them free on our platform here.

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

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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.