Persimmon Plc Just Recorded A 5.2% Revenue Beat: Here's What Analysts Think

Persimmon Plc (LON:PSN) last week reported its latest half-yearly results, which makes it a good time for investors to dive in and see if the business is performing in line with expectations. It was a workmanlike result, with revenues of UK£1.3b coming in 5.2% ahead of expectations, and statutory earnings per share of UK£0.80, in line with analyst appraisals. 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. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.

View our latest analysis for Persimmon

Following last week's earnings report, Persimmon's 17 analysts are forecasting 2024 revenues to be UK£2.86b, 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£2.82b and earnings per share (EPS) of UK£0.80 in 2024. So it's pretty clear that, although the analysts have updated their estimates, there's been no major change in expectations for the business following the latest results.

It will come as no surprise then, to learn that the consensus price target is largely unchanged at UK£15.90. 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. Currently, the most bullish analyst values Persimmon at UK£23.00 per share, while the most bearish prices it at UK£13.93. There are definitely some different views on the stock, but the range of estimates is not wide enough as to imply that the situation is unforecastable, in our view.

Of course, another way to look at these forecasts is to place them into context against the industry itself. We would also point out that the forecast 3.0% annualised revenue decline to the end of 2024 is roughly in line with the historical trend, which saw revenues shrink 3.1% annually 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 5.8% 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 most important thing to take away is that there's been no major change in sentiment, with the analysts reconfirming that the business is performing in line with their previous earnings per share estimates. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting that it's tracking in line with expectations. Although our data does suggest that Persimmon's revenue is expected to 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.

It is also worth noting that we have found 2 warning signs for Persimmon 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.