Analysts Have Made A Financial Statement On Coats Group plc's (LON:COA) Half-Year Report

It's been a sad week for Coats Group plc (LON:COA), who've watched their investment drop 11% to UK£0.73 in the week since the company reported its half-year result. Results were roughly in line with estimates, with revenues of US$718m and statutory earnings per share of US$0.048. 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. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

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Following the recent earnings report, the consensus from six analysts covering Coats Group is for revenues of US$1.44b in 2025. This implies a measurable 3.9% decline in revenue compared to the last 12 months. Statutory earnings per share are predicted to soar 38% to US$0.072. In the lead-up to this report, the analysts had been modelling revenues of US$1.46b and earnings per share (EPS) of US$0.081 in 2025. So there's definitely been a decline in sentiment after the latest results, noting the substantial drop in new EPS forecasts.

See our latest analysis for Coats Group

It might be a surprise to learn that the consensus price target was broadly unchanged at UK£1.18, with the analysts clearly implying that the forecast decline in earnings is not expected to have much of an impact on valuation. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. The most optimistic Coats Group analyst has a price target of UK£1.30 per share, while the most pessimistic values it at UK£1.00. Still, with such a tight range of estimates, it suggeststhe analysts have a pretty good idea of what they think the company is worth.

Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. We would highlight that revenue is expected to reverse, with a forecast 7.7% annualised decline to the end of 2025. That is a notable change from historical growth of 3.7% 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 5.9% per year. It's pretty clear that Coats Group's revenues are expected to perform substantially worse than 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. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting that it's tracking in line with expectations. Although our data does suggest that Coats Group's revenue is expected to perform worse than the wider industry. The consensus price target held steady at UK£1.18, with the latest estimates not enough to have an impact on their price targets.

With that in mind, we wouldn't be too quick to come to a conclusion on Coats Group. Long-term earnings power is much more important than next year's profits. At Simply Wall St, we have a full range of analyst estimates for Coats 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 3 warning signs for Coats Group you should be aware of, and 1 of them can't be ignored.

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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.