McBride plc (LON:MCB) Just Reported And Analysts Have Been Lifting Their Price Targets

It's been a good week for McBride plc (LON:MCB) shareholders, because the company has just released its latest half-year results, and the shares gained 2.5% to UK£0.83. Results were roughly in line with estimates, with revenues of UK£363m and statutory earnings per share of UK£0.036. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. 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 McBride

Taking into account the latest results, McBride's five analysts currently expect revenues in 2021 to be UK£715.8m, approximately in line with the last 12 months. Per-share earnings are expected to ascend 15% to UK£0.081. In the lead-up to this report, the analysts had been modelling revenues of UK£718.3m and earnings per share (EPS) of UK£0.08 in 2021. 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.

With the analysts reconfirming their revenue and earnings forecasts, it's surprising to see that the price target rose 8.4% to UK£0.90. It looks as though they previously had some doubts over whether the business would live up to their expectations. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. Currently, the most bullish analyst values McBride at UK£1.05 per share, while the most bearish prices it at UK£0.77. As you can see, analysts are not all in agreement on the stock's future, but the range of estimates is still reasonably narrow, which could suggest that the outcome is not totally unpredictable.

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. These estimates imply that sales are expected to slow, with a forecast revenue decline of 0.4%, a significant reduction from annual growth of 1.5% 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 2.2% annually for the foreseeable future. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - McBride is expected to lag 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. On the plus side, there were no major changes to revenue estimates; although forecasts imply revenues will perform worse than the wider industry. There was also a nice increase in the price target, with the analysts clearly feeling that the intrinsic value of the business is improving.

With that in mind, we wouldn't be too quick to come to a conclusion on McBride. Long-term earnings power is much more important than next year's profits. At Simply Wall St, we have a full range of analyst estimates for McBride going out to 2023, and you can see them free on our platform here..

Before you take the next step you should know about the 3 warning signs for McBride that we have uncovered.

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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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