ME Group International plc (LON:MEGP) Released Earnings Last Week And Analysts Lifted Their Price Target To UK£1.97

It's been a pretty great week for ME Group International plc (LON:MEGP) shareholders, with its shares surging 18% to UK£1.60 in the week since its latest yearly results. The result was positive overall - although revenues of UK£298m were in line with what the analysts predicted, ME Group International surprised by delivering a statutory profit of UK£0.13 per share, modestly greater than expected. 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.

See our latest analysis for ME Group International

Taking into account the latest results, the current consensus from ME Group International's three analysts is for revenues of UK£322.2m in 2024. This would reflect a notable 8.2% increase on its revenue over the past 12 months. Per-share earnings are expected to accumulate 4.6% to UK£0.14. Before this earnings report, the analysts had been forecasting revenues of UK£322.5m and earnings per share (EPS) of UK£0.14 in 2024. So the consensus seems to have become somewhat more optimistic on ME Group International's earnings potential following these results.

The consensus price target rose 8.1% to UK£1.97, suggesting that higher earnings estimates flow through to the stock's valuation as well. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. Currently, the most bullish analyst values ME Group International at UK£2.05 per share, while the most bearish prices it at UK£1.85. Still, with such a tight range of estimates, it suggeststhe analysts have a pretty good idea of what they think the company is worth.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the ME Group International's past performance and to peers in the same industry. It's clear from the latest estimates that ME Group International's rate of growth is expected to accelerate meaningfully, with the forecast 8.2% annualised revenue growth to the end of 2024 noticeably faster than its historical growth of 5.4% p.a. over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 1.8% annually. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect ME Group International to grow faster than the wider industry.

The Bottom Line

The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around ME Group International's earnings potential next year. Happily, there were no major changes to revenue forecasts, with the business still expected to grow faster 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.

Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. We have estimates - from multiple ME Group International analysts - going out to 2026, and you can see them free on our platform here.

Before you take the next step you should know about the 1 warning sign for ME Group International that we have uncovered.

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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.