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

Last week, you might have seen that NWF Group plc (LON:NWF) released its yearly result to the market. The early response was not positive, with shares down 5.8% to UK£2.45 in the past week. NWF Group reported UK£1.1b in revenue, roughly in line with analyst forecasts, although statutory earnings per share (EPS) of UK£0.30 beat expectations, being 6.7% higher than what the analysts 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. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on NWF Group after the latest results.

Check out our latest analysis for NWF Group

Taking into account the latest results, the current consensus, from the three analysts covering NWF Group, is for revenues of UK£977.0m in 2024. This implies a small 7.3% reduction in NWF Group's revenue over the past 12 months. Statutory earnings per share are expected to tumble 32% to UK£0.20 in the same period. Yet prior to the latest earnings, the analysts had been anticipated revenues of UK£1.00b and earnings per share (EPS) of UK£0.21 in 2024. The consensus seems maybe a little more pessimistic, trimming their revenue forecasts after the latest results even though there was no change to its EPS estimates.

The consensus has reconfirmed its price target of UK£2.79, showing that the analysts don't expect weaker revenue expectations next year to have a material impact on NWF Group's market value. 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 NWF Group analyst has a price target of UK£2.83 per share, while the most pessimistic values it at UK£2.75. Even so, with a relatively close grouping of estimates, it looks like the analysts are quite confident in their valuations, suggesting NWF Group is an easy business to forecast or the the analysts are all using similar assumptions.

Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. We would highlight that revenue is expected to reverse, with a forecast 7.3% annualised decline to the end of 2024. That is a notable change from historical growth of 11% over the last five years. Yet aggregate analyst estimates for other companies in the industry suggest that industry revenues are forecast to decline 3.0% per year. The forecasts do look bearish for NWF Group, since they're expecting it to shrink faster than the 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. Unfortunately they also cut their revenue estimates for next year. Forecasts imply the business' revenue is expected to perform worse than the wider industry. That said, earnings per share are more important for creating value for shareholders. Still, earnings per share are more important to value creation for shareholders. The consensus price target held steady at UK£2.79, 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 NWF 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 1 warning sign for NWF Group 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.