IG Group Holdings plc Just Beat Earnings Expectations: Here's What Analysts Think Will Happen Next

IG Group Holdings plc (LON:IGG) just released its annual report and things are looking bullish. Results were good overall, with revenues beating analyst predictions by 2.5% to hit UK£855m. Statutory earnings per share (EPS) came in at UK£1.00, some 6.4% above whatthe analysts had expected. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.

See our latest analysis for IG Group Holdings

Following last week's earnings report, IG Group Holdings' four analysts are forecasting 2022 revenues to be UK£849.8m, approximately in line with the last 12 months. Statutory earnings per share are expected to plummet 30% to UK£0.70 in the same period. Before this earnings report, the analysts had been forecasting revenues of UK£834.4m and earnings per share (EPS) of UK£0.70 in 2022. So it's pretty clear that, although the analysts have updated their estimates, there's been no major change in expectations for the business following the latest results.

It will come as no surprise then, to learn that the consensus price target is largely unchanged at UK£10.14. 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. There are some variant perceptions on IG Group Holdings, with the most bullish analyst valuing it at UK£11.85 and the most bearish at UK£6.67 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.

Of course, another way to look at these forecasts is to place them into context against the industry itself. We would highlight that sales are expected to reverse, with a forecast 0.6% annualised revenue decline to the end of 2022. That is a notable change from historical growth of 9.3% over the last five years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 0.05% annually for the foreseeable future. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - IG Group Holdings is expected to lag the wider industry.

The Bottom Line

The most important thing to take away is that there's been no major change in sentiment, with the analysts reconfirming that the business is performing in line with their previous earnings per share estimates. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting sales are tracking in line with expectations - although our data does suggest that IG Group Holdings' revenues are expected to perform worse 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.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have estimates - from multiple IG Group Holdings analysts - going out to 2024, and you can see them free on our platform here.

You still need to take note of risks, for example - IG Group Holdings has 2 warning signs (and 1 which is significant) we think you should know about.

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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.
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