Brewin Dolphin Holdings PLC Beat Analyst Estimates: See What The Consensus Is Forecasting For This Year

Shareholders might have noticed that Brewin Dolphin Holdings PLC (LON:BRW) filed its yearly result this time last week. The early response was not positive, with shares down 8.5% to UK£2.70 in the past week. Brewin Dolphin Holdings reported UK£361m in revenue, roughly in line with analyst forecasts, although statutory earnings per share (EPS) of UK£0.16 beat expectations, being 7.0% higher than what the analysts expected. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.

View our latest analysis for Brewin Dolphin Holdings

Taking into account the latest results, the current consensus from Brewin Dolphin Holdings' seven analysts is for revenues of UK£375.5m in 2021, which would reflect an okay 3.9% increase on its sales over the past 12 months. Per-share earnings are expected to accumulate 7.4% to UK£0.17. Before this earnings report, the analysts had been forecasting revenues of UK£381.1m and earnings per share (EPS) of UK£0.17 in 2021. So the consensus seems to have become somewhat more optimistic on Brewin Dolphin Holdings' earnings potential following these results.

There's been no major changes to the consensus price target of UK£3.54, suggesting that the improved earnings per share outlook is not enough to have a long-term positive impact on the stock's 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. The most optimistic Brewin Dolphin Holdings analyst has a price target of UK£3.85 per share, while the most pessimistic values it at UK£3.00. This is a very narrow spread of estimates, implying either that Brewin Dolphin Holdings is an easy company to value, or - more likely - the analysts are relying heavily on some key assumptions.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Brewin Dolphin Holdings' past performance and to peers in the same industry. It's pretty clear that there is an expectation that Brewin Dolphin Holdings' revenue growth will slow down substantially, with revenues next year expected to grow 3.9%, compared to a historical growth rate of 5.6% over the past five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 6.1% per year. Factoring in the forecast slowdown in growth, it seems obvious that Brewin Dolphin Holdings is also expected to grow slower than other industry participants.

The Bottom Line

The most important thing here is that the analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards Brewin Dolphin Holdings following these results. On the plus side, there were no major changes to revenue estimates; although forecasts imply revenues will perform worse than the wider industry. The consensus price target held steady at UK£3.54, with the latest estimates not enough to have an impact on their price targets.

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 Brewin Dolphin Holdings analysts - going out to 2025, and you can see them free on our platform here.

We also provide an overview of the Brewin Dolphin Holdings Board and CEO remuneration and length of tenure at the company, and whether insiders have been buying the stock, here.

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