Analyst Estimates: Here's What Brokers Think Of Brooks Macdonald Group plc (LON:BRK) After Its Half-Yearly Report

As you might know, Brooks Macdonald Group plc (LON:BRK) recently reported its half-year numbers. It was a workmanlike result, with revenues of UK£64m coming in 2.4% ahead of expectations, and statutory earnings per share of UK£1.13, 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. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Brooks Macdonald Group after the latest results.

See our latest analysis for Brooks Macdonald Group

Taking into account the latest results, the eight analysts covering Brooks Macdonald Group provided consensus estimates of UK£125.4m revenue in 2024, which would reflect a small 2.4% decline over the past 12 months. Per-share earnings are expected to shoot up 94% to UK£0.80. Before this earnings report, the analysts had been forecasting revenues of UK£126.0m and earnings per share (EPS) of UK£1.07 in 2024. So there's definitely been a decline in sentiment after the latest results, noting the pretty serious reduction to new EPS forecasts.

It might be a surprise to learn that the consensus price target was broadly unchanged at UK£24.01, with the analysts clearly implying that the forecast decline in earnings is not expected to have much of an impact on valuation. 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 Brooks Macdonald Group at UK£30.00 per share, while the most bearish prices it at UK£20.00. 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 Brooks Macdonald Group 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. These estimates imply that revenue is expected to slow, with a forecast annualised decline of 4.7% by the end of 2024. This indicates a significant reduction from annual growth of 4.3% over the last five years. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 2.8% per year. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Brooks Macdonald Group is expected to lag 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 Brooks Macdonald Group. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting that it's tracking in line with expectations. Although our data does suggest that Brooks Macdonald Group's revenue is expected to perform worse than the wider industry. The consensus price target held steady at UK£24.01, with the latest estimates not enough to have an impact on their price targets.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have estimates - from multiple Brooks Macdonald Group analysts - going out to 2026, and you can see them free on our platform here.

It is also worth noting that we have found 3 warning signs for Brooks Macdonald Group 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.