New Forecasts: Here's What Analysts Think The Future Holds For Legal & General Group Plc (LON:LGEN)

Legal & General Group Plc (LON:LGEN) shareholders will have a reason to smile today, with the analysts making substantial upgrades to this year's forecasts. The analysts have sharply increased their revenue numbers, with a view that Legal & General Group will make substantially more sales than they'd previously expected.

Following the upgrade, the most recent consensus for Legal & General Group from its seven analysts is for revenues of UK£56b in 2021 which, if met, would be a major 213% increase on its sales over the past 12 months. Prior to the latest estimates, the analysts were forecasting revenues of UK£41b in 2021. It looks like there's been a clear increase in optimism around Legal & General Group, given the considerable lift to revenue forecasts.

View our latest analysis for Legal & General Group

We'd point out that there was no major changes to their price target of UK£2.92, suggesting the latest estimates were not enough to shift their view on the value of the business. 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. There are some variant perceptions on Legal & General Group, with the most bullish analyst valuing it at UK£3.80 and the most bearish at UK£1.65 per share. This is a fairly broad spread of estimates, suggesting that the analysts are forecasting a wide range of possible outcomes for the business.

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 Legal & General Group's growth to accelerate, with the forecast 213% annualised growth to the end of 2021 ranking favourably alongside historical growth of 9.7% 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 4.0% per year. Factoring in the forecast acceleration in revenue, it's pretty clear that Legal & General Group is expected to grow much faster than its industry.

The Bottom Line

The most important thing to take away from this upgrade is that analysts lifted their revenue estimates for this year. They're also forecasting more rapid revenue growth than the wider market. Seeing the dramatic upgrade to this year's forecasts, it might be time to take another look at Legal & General Group.

But wait - there's more! We have analyst estimates for Legal & General Group going out to 2023, and you can see them free on our platform here.

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