Earnings Miss: JTC PLC Missed EPS By 51% And Analysts Are Revising Their Forecasts

JTC PLC (LON:JTC) shareholders are probably feeling a little disappointed, since its shares fell 2.2% to UK£6.21 in the week after its latest yearly results. Statutory earnings per share fell badly short of expectations, coming in at UK£0.09, some 51% below analyst forecasts, although revenues were okay, approximately in line with analyst estimates at UK£115m. 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. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.

View our latest analysis for JTC

Taking into account the latest results, the current consensus from JTC's six analysts is for revenues of UK£147.7m in 2021, which would reflect a sizeable 28% increase on its sales over the past 12 months. Statutory earnings per share are predicted to surge 163% to UK£0.24. In the lead-up to this report, the analysts had been modelling revenues of UK£143.4m and earnings per share (EPS) of UK£0.24 in 2021. There doesn't appear to have been a major change in sentiment following the results, other than the slight bump in revenue estimates.

It may not be a surprise to see thatthe analysts have reconfirmed their price target of UK£6.98, implying that the uplift in sales is not expected to greatly contribute to JTC's valuation in the near term. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. There are some variant perceptions on JTC, with the most bullish analyst valuing it at UK£7.65 and the most bearish at UK£4.75 per share. This shows there is still a bit of diversity in estimates, but analysts don't appear to be totally split on the stock as though it might be a success or failure situation.

Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. The analysts are definitely expecting JTC's growth to accelerate, with the forecast 28% annualised growth to the end of 2021 ranking favourably alongside historical growth of 20% 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 1.3% per year. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect JTC to grow faster than the wider industry.

The Bottom Line

The most obvious conclusion is that there's been no major change in the business' prospects in recent times, with the analysts holding their earnings forecasts steady, in line with previous estimates. Pleasantly, they also upgraded their revenue estimates, and their forecasts suggest the business is expected to grow faster than the wider industry. The consensus price target held steady at UK£6.98, 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. At Simply Wall St, we have a full range of analyst estimates for JTC going out to 2024, and you can see them free on our platform here..

Even so, be aware that JTC is showing 4 warning signs in our investment analysis , you should know about...

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This article by Simply Wall St is general in nature. 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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