Earnings Miss: Capital Limited Missed EPS By 18% And Analysts Are Revising Their Forecasts

Capital Limited (LON:CAPD) shareholders are probably feeling a little disappointed, since its shares fell 2.6% to UK£0.60 in the week after its latest annual results. It was not a great result overall. While revenues of US$348m were in line with analyst predictions, earnings were less than expected, missing statutory estimates by 18% to hit US$0.088 per share. 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. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

After the latest results, the consensus from Capital's four analysts is for revenues of US$308.8m in 2025, which would reflect an uncomfortable 11% decline in revenue compared to the last year of performance. Statutory earnings per share are forecast to dive 27% to US$0.065 in the same period. Before this earnings report, the analysts had been forecasting revenues of US$305.3m and earnings per share (EPS) of US$0.062 in 2025. So the consensus seems to have become somewhat more optimistic on Capital's earnings potential following these results.

See our latest analysis for Capital

There's been no major changes to the consensus price target of UK£0.99, suggesting that the improved earnings per share outlook is not enough to have a long-term positive impact on the stock's valuation. 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. The most optimistic Capital analyst has a price target of UK£1.60 per share, while the most pessimistic values it at UK£0.60. Note the wide gap in analyst price targets? This implies to us that there is a fairly broad range of possible scenarios for the underlying business.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Capital's past performance and to peers in the same industry. These estimates imply that revenue is expected to slow, with a forecast annualised decline of 11% by the end of 2025. This indicates a significant reduction from annual growth of 22% 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 2.0% annually for the foreseeable future. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Capital 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 Capital following these results. On the plus side, there were no major changes to revenue estimates; although forecasts imply they will perform worse than the wider industry. The consensus price target held steady at UK£0.99, with the latest estimates not enough to have an impact on their price targets.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. At Simply Wall St, we have a full range of analyst estimates for Capital going out to 2027, and you can see them free on our platform here..

You should always think about risks though. Case in point, we've spotted 4 warning signs for Capital you should be aware of.

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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.