3i Group plc Just Missed Revenue By 12%: Here's What Analysts Think Will Happen Next

As you might know, 3i Group plc (LON:III) recently reported its yearly numbers. Revenues were UK£4.0b, 12% below analyst expectations, although losses didn't appear to worsen significantly, with a per-share statutory loss of UK£3.97 being in line with what the analysts forecast. 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. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on 3i Group after the latest results.

Check out our latest analysis for 3i Group

Taking into account the latest results, the consensus forecast from 3i Group's eight analysts is for revenues of UK£4.74b in 2025. This reflects a notable 20% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to increase 2.6% to UK£4.08. Yet prior to the latest earnings, the analysts had been anticipated revenues of UK£4.74b and earnings per share (EPS) of UK£4.62 in 2025. So there's definitely been a decline in sentiment after the latest results, noting the substantial drop in new EPS forecasts.

It might be a surprise to learn that the consensus price target was broadly unchanged at UK£29.86, with the analysts clearly implying that the forecast decline in earnings is not expected to have much of an impact on valuation. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. The most optimistic 3i Group analyst has a price target of UK£32.00 per share, while the most pessimistic values it at UK£26.50. With such a narrow range of valuations, the analysts apparently share similar views on what they think the business is worth.

Of course, another way to look at these forecasts is to place them into context against the industry itself. It's pretty clear that there is an expectation that 3i Group's revenue growth will slow down substantially, with revenues to the end of 2025 expected to display 20% growth on an annualised basis. This is compared to a historical growth rate of 33% over the past five years. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 5.0% per year. Even after the forecast slowdown in growth, it seems obvious that 3i Group is also expected to grow faster than the wider industry.

The Bottom Line

The most important thing to take away is that the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. Happily, there were no major changes to revenue forecasts, with the business still expected to grow faster than the wider industry. The consensus price target held steady at UK£29.86, with the latest estimates not enough to have an impact on their price targets.

With that in mind, we wouldn't be too quick to come to a conclusion on 3i Group. Long-term earnings power is much more important than next year's profits. We have forecasts for 3i Group going out to 2027, and you can see them free on our platform here.

Don't forget that there may still be risks. For instance, we've identified 1 warning sign for 3i Group that you should be aware of.

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.