Investors in Man Group Plc (LON:EMG) had a good week, as its shares rose 2.8% to close at UK£2.60 following the release of its half-yearly results. It was a workmanlike result, with revenues of US$770m coming in 9.6% ahead of expectations, and statutory earnings per share of US$0.19, 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. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.
Check out our latest analysis for Man Group
Taking into account the latest results, the current consensus from Man Group's ten analysts is for revenues of US$1.65b in 2024. This would reflect a notable 18% increase on its revenue over the past 12 months. Statutory earnings per share are predicted to bounce 31% to US$0.36. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$1.58b and earnings per share (EPS) of US$0.37 in 2024. Overall it looks as though the analysts were a bit mixed on the latest results. Although there was a a notable to revenue, the consensus also made a small dip in its earnings per share forecasts.
There's been no major changes to the price target of UK£3.03, suggesting that the impact of higher forecast revenue and lower earnings won't result in a meaningful change to the business' 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. There are some variant perceptions on Man Group, with the most bullish analyst valuing it at UK£3.35 and the most bearish at UK£1.93 per share. 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.
Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. The analysts are definitely expecting Man Group's growth to accelerate, with the forecast 40% annualised growth to the end of 2024 ranking favourably alongside historical growth of 7.8% per annum over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 4.4% per year. Factoring in the forecast acceleration in revenue, it's pretty clear that Man Group is expected to grow much faster than its industry.
The Bottom Line
The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Man Group. Happily, they also upgraded their revenue estimates, and are forecasting them to grow faster 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.
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. At Simply Wall St, we have a full range of analyst estimates for Man Group going out to 2026, and you can see them free on our platform here..
And what about risks? Every company has them, and we've spotted 2 warning signs for Man Group you should know about.
New: Manage All Your Stock Portfolios in One Place
We've created the ultimate portfolio companion for stock investors, and it's free.
• Connect an unlimited number of Portfolios and see your total in one currency
• Be alerted to new Warning Signs or Risks via email or mobile
• Track the Fair Value of your stocks
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
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.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com
About LSE:EMG
Very undervalued with reasonable growth potential and pays a dividend.
