Stock Analysis

Earnings Update: Here's Why Analysts Just Lifted Their Crest Nicholson Holdings plc (LON:CRST) Price Target To UK£3.13

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Investors in Crest Nicholson Holdings plc (LON:CRST) had a good week, as its shares rose 6.6% to close at UK£3.29 following the release of its yearly results. The results overall were pretty much dead in line with analyst forecasts; revenues were UK£678m and statutory losses were UK£0.042 per share. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

Check out our latest analysis for Crest Nicholson Holdings

LSE:CRST Earnings and Revenue Growth January 29th 2021

Following last week's earnings report, Crest Nicholson Holdings' nine analysts are forecasting 2021 revenues to be UK£677.9m, approximately in line with the last 12 months. Earnings are expected to improve, with Crest Nicholson Holdings forecast to report a statutory profit of UK£0.21 per share. In the lead-up to this report, the analysts had been modelling revenues of UK£770.6m and earnings per share (EPS) of UK£0.22 in 2021. Indeed, we can see that sentiment has declined measurably after results came out, with a real cut to revenue estimates and a minor downgrade to EPS estimates to boot.

The average price target climbed 8.7% to UK£3.13despite the reduced earnings forecasts, suggesting that this earnings impact could be a positive for the stock, once it passes.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Crest Nicholson Holdings' past performance and to peers in the same industry.

The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Crest Nicholson Holdings. On the negative side, they also downgraded their revenue estimates, and forecasts imply revenues will perform worse than the wider industry. We note an upgrade to the price target, suggesting that the analysts believes the intrinsic value of the business is likely to improve over time.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. At Simply Wall St, we have a full range of analyst estimates for Crest Nicholson Holdings going out to 2023, 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 Crest Nicholson Holdings you should be aware of.

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