Analyst Estimates: Here's What Brokers Think Of Admiral Group plc (LON:ADM) After Its Half-Yearly Report

Admiral Group plc (LON:ADM) investors will be delighted, with the company turning in some strong numbers with its latest results. Results were good overall, with revenues beating analyst predictions by 4.9% to hit UK£2.6b. Statutory earnings per share (EPS) came in at UK£1.31, some 5.3% above whatthe analysts had expected. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.

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After the latest results, the consensus from Admiral Group's nine analysts is for revenues of UK£4.96b in 2025, which would reflect a noticeable 5.4% decline in revenue compared to the last year of performance. Statutory earnings per share are forecast to descend 12% to UK£2.41 in the same period. Before this earnings report, the analysts had been forecasting revenues of UK£4.95b and earnings per share (EPS) of UK£2.32 in 2025. So the consensus seems to have become somewhat more optimistic on Admiral Group's earnings potential following these results.

View our latest analysis for Admiral Group

There's been no major changes to the consensus price target of UK£34.38, suggesting that the improved earnings per share outlook is not enough to have a long-term positive impact on the stock's 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. There are some variant perceptions on Admiral Group, with the most bullish analyst valuing it at UK£40.00 and the most bearish at UK£22.70 per share. These price targets show that analysts do have some differing views on the business, but the estimates do not vary enough to suggest to us that some are betting on wild success or utter failure.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Admiral Group's past performance and to peers in the same industry. We would highlight that revenue is expected to reverse, with a forecast 10% annualised decline to the end of 2025. That is a notable change from historical growth of 30% 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 5.8% annually for the foreseeable future. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Admiral Group is expected to lag the wider industry.

The Bottom Line

The most important thing here is that the analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards Admiral Group following these results. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting that it's tracking in line with expectations. Although our data does suggest that Admiral Group's revenue is expected to perform worse than the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.

Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. We have forecasts for Admiral Group going out to 2027, and you can see them free on our platform here.

Even so, be aware that Admiral Group is showing 3 warning signs in our investment analysis , and 2 of those make us uncomfortable...

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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.