Here's What Analysts Are Forecasting For J Sainsbury plc (LON:SBRY) After Its Half-Yearly Results

It's been a good week for J Sainsbury plc (LON:SBRY) shareholders, because the company has just released its latest half-year results, and the shares gained 7.4% to UK£2.75. J Sainsbury reported in line with analyst predictions, delivering revenues of UK£17b and statutory earnings per share of UK£0.088, suggesting the business is executing well and in line with its plan. 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. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

View our latest analysis for J Sainsbury

Following last week's earnings report, J Sainsbury's eleven analysts are forecasting 2024 revenues to be UK£32.3b, approximately in line with the last 12 months. Statutory earnings per share are predicted to jump 427% to UK£0.17. Yet prior to the latest earnings, the analysts had been anticipated revenues of UK£32.3b and earnings per share (EPS) of UK£0.18 in 2024. So it looks like there's been a small decline in overall sentiment after the recent results - there's been no major change to revenue estimates, but the analysts did make a small dip in their earnings per share forecasts.

The consensus price target held steady at UK£2.77, with the analysts seemingly voting that their lower forecast earnings are not expected to lead to a lower stock price in the foreseeable future. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. There are some variant perceptions on J Sainsbury, with the most bullish analyst valuing it at UK£3.20 and the most bearish at UK£2.35 per share. These price targets show that analysts do have some differing views on the business, but the estimates do not vary enough to suggest to us that some are betting on wild success or utter failure.

Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. The period to the end of 2024 brings more of the same, according to the analysts, with revenue forecast to display 1.8% growth on an annualised basis. That is in line with its 2.0% annual growth over the past five years. Compare this with the broader industry (in aggregate), which analyst estimates suggest will see revenues grow 4.2% annually. So it's pretty clear that J Sainsbury is expected to grow slower than similar companies in the same 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. On the plus side, there were no major changes to revenue estimates; although forecasts imply they will perform worse than the wider industry. The consensus price target held steady at UK£2.77, 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 J Sainsbury. Long-term earnings power is much more important than next year's profits. We have estimates - from multiple J Sainsbury analysts - going out to 2026, and you can see them free on our platform here.

Plus, you should also learn about the 3 warning signs we've spotted with J Sainsbury .

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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.