Persimmon Plc Just Beat Revenue By 7.5%: Here's What Analysts Think Will Happen Next

Shareholders might have noticed that Persimmon Plc (LON:PSN) filed its full-year result this time last week. The early response was not positive, with shares down 4.7% to UK£13.07 in the past week. It was a workmanlike result, with revenues of UK£2.8b coming in 7.5% ahead of expectations, and statutory earnings per share of UK£0.80, in line with analyst appraisals. 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. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.

See our latest analysis for Persimmon

Following last week's earnings report, Persimmon's 16 analysts are forecasting 2024 revenues to be UK£2.77b, approximately in line with the last 12 months. Statutory per-share earnings are expected to be UK£0.81, roughly flat on the last 12 months. In the lead-up to this report, the analysts had been modelling revenues of UK£2.73b and earnings per share (EPS) of UK£0.87 in 2024. The analysts seem to have become a little more negative on the business after the latest results, given the minor downgrade to their earnings per share numbers for next year.

The consensus price target held steady at UK£14.87, with the analysts seemingly voting that their lower forecast earnings are not expected to lead to a lower stock price in the foreseeable future. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. There are some variant perceptions on Persimmon, with the most bullish analyst valuing it at UK£23.00 and the most bearish at UK£11.90 per share. Note the wide gap in analyst price targets? This implies to us that there is a fairly broad range of possible scenarios for the underlying business.

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 that stands out from these estimates is that shrinking revenues are expected to moderate over the period ending 2024 compared to the historical decline of 2.0% per annum over the past five years. Compare this against analyst estimates for companies in the broader industry, which suggest that revenues (in aggregate) are expected to grow 4.7% annually. So it's pretty clear that, while it does have declining revenues, the analysts also expect Persimmon to suffer worse than 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 Persimmon. 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 Persimmon. Long-term earnings power is much more important than next year's profits. We have forecasts for Persimmon going out to 2026, and you can see them free on our platform here.

Plus, you should also learn about the 2 warning signs we've spotted with Persimmon .

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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.