Revenue Beat: Forterra plc Exceeded Revenue Forecasts By 8.8% And Analysts Are Updating Their Estimates

It's been a good week for Forterra plc (LON:FORT) shareholders, because the company has just released its latest half-year results, and the shares gained 6.3% to UK£2.02. Results overall were respectable, with statutory earnings of UK£0.083 per share roughly in line with what the analysts had forecast. Revenues of UK£195m came in 8.8% ahead of analyst predictions. 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. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.

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Following last week's earnings report, Forterra's eleven analysts are forecasting 2025 revenues to be UK£377.8m, approximately in line with the last 12 months. Statutory earnings per share are predicted to soar 33% to UK£0.099. In the lead-up to this report, the analysts had been modelling revenues of UK£370.4m and earnings per share (EPS) of UK£0.098 in 2025. So it looks like there's been no major change in sentiment following the latest results, although the analysts have made a slight bump in to revenue forecasts.

View our latest analysis for Forterra

Even though revenue forecasts increased, there was no change to the consensus price target of UK£2.28, suggesting the analysts are focused on earnings as the driver of value creation. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. The most optimistic Forterra analyst has a price target of UK£3.20 per share, while the most pessimistic values it at UK£1.70. 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 Forterra's past performance and to peers in the same industry. We would highlight that Forterra's revenue growth is expected to slow, with the forecast 0.3% annualised growth rate until the end of 2025 being well below the historical 1.9% p.a. growth over the last five years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 5.1% annually. So it's pretty clear that, while revenue growth is expected to slow down, the wider industry is also expected to grow faster than Forterra.

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. Fortunately, they also upgraded their revenue estimates, although our data indicates it 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.

With that in mind, we wouldn't be too quick to come to a conclusion on Forterra. Long-term earnings power is much more important than next year's profits. We have estimates - from multiple Forterra analysts - going out to 2027, and you can see them free on our platform here.

You can also see whether Forterra is carrying too much debt, and whether its balance sheet is healthy, for free on our platform here.

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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.