Results: M.P. Evans Group plc Exceeded Expectations And The Consensus Has Updated Its Estimates

M.P. Evans Group plc (LON:MPE) just released its latest full-year results and things are looking bullish. The company beat both earnings and revenue forecasts, with revenue of US$175m, some 7.7% above estimates, and statutory earnings per share (EPS) coming in at US$0.37, 41% ahead of expectations. 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. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.

Check out our latest analysis for M.P. Evans Group

Following the latest results, M.P. Evans Group's twin analysts are now forecasting revenues of US$206.9m in 2021. This would be a meaningful 19% improvement in sales compared to the last 12 months. Per-share earnings are expected to soar 40% to US$0.53. Before this earnings report, the analysts had been forecasting revenues of US$180.5m and earnings per share (EPS) of US$0.37 in 2021. There has definitely been an improvement in perception after these results, with the analysts noticeably increasing both their earnings and revenue estimates.

Despite these upgrades,the analysts have not made any major changes to their price target of US$13.17, suggesting that the higher estimates are not likely to have a long term impact on what the stock is worth.

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. The analysts are definitely expecting M.P. Evans Group's growth to accelerate, with the forecast 19% annualised growth to the end of 2021 ranking favourably alongside historical growth of 15% 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 5.3% per year. Factoring in the forecast acceleration in revenue, it's pretty clear that M.P. Evans Group is expected to grow much faster than its industry.

The Bottom Line

The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around M.P. Evans Group's earnings potential next year. 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 US$13.17, 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 M.P. Evans Group. Long-term earnings power is much more important than next year's profits. We have analyst estimates for M.P. Evans Group going out as far as 2023, and you can see them free on our platform here.

However, before you get too enthused, we've discovered 1 warning sign for M.P. Evans Group that you should be aware of.

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