Dr. Martens plc (LON:DOCS) Half-Yearly Results: Here's What Analysts Are Forecasting For This Year

The investors in Dr. Martens plc's (LON:DOCS) will be rubbing their hands together with glee today, after the share price leapt 22% to UK£0.69 in the week following its interim results. Results overall were respectable, with statutory earnings of UK£0.07 per share roughly in line with what the analysts had forecast. Revenues of UK£325m came in 3.7% ahead of analyst predictions. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.

Check out our latest analysis for Dr. Martens

Following last week's earnings report, Dr. Martens' seven analysts are forecasting 2025 revenues to be UK£820.9m, approximately in line with the last 12 months. Statutory earnings per share are forecast to reduce 6.6% to UK£0.029 in the same period. Yet prior to the latest earnings, the analysts had been anticipated revenues of UK£823.5m and earnings per share (EPS) of UK£0.027 in 2025. The analysts seems to have become more bullish on the business, judging by their new earnings per share estimates.

The consensus price target was unchanged at UK£0.76, implying that the improved earnings outlook is not expected to have a long term impact on value creation for shareholders. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. There are some variant perceptions on Dr. Martens, with the most bullish analyst valuing it at UK£0.95 and the most bearish at UK£0.60 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 Dr. Martens 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. One thing stands out from these estimates, which is that Dr. Martens is forecast to grow faster in the future than it has in the past, with revenues expected to display 3.8% annualised growth until the end of 2025. If achieved, this would be a much better result than the 0.8% annual decline over the past three years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenue grow 6.6% per year. So although Dr. Martens' revenue growth is expected to improve, it is still expected to grow slower than the industry.

The Bottom Line

The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around Dr. Martens' earnings potential next year. On the plus side, there were no major changes to revenue estimates; although forecasts imply they will perform worse than 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 Dr. Martens. Long-term earnings power is much more important than next year's profits. We have forecasts for Dr. Martens going out to 2027, and you can see them free on our platform here.

It is also worth noting that we have found 4 warning signs for Dr. Martens (1 is potentially serious!) that you need to take into consideration.

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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.