Here's What Analysts Are Forecasting For Marshalls plc (LON:MSLH) After Its Half-Yearly Results

Last week saw the newest half-yearly earnings release from Marshalls plc (LON:MSLH), an important milestone in the company's journey to build a stronger business. Marshalls reported in line with analyst predictions, delivering revenues of UK£307m and statutory earnings per share of UK£0.073, suggesting the business is executing well and in line with its plan. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.

See our latest analysis for Marshalls

Taking into account the latest results, the consensus forecast from Marshalls' six analysts is for revenues of UK£655.6m in 2024. This reflects a reasonable 5.1% improvement in revenue compared to the last 12 months. Per-share earnings are expected to bounce 77% to UK£0.15. Before this earnings report, the analysts had been forecasting revenues of UK£668.0m and earnings per share (EPS) of UK£0.16 in 2024. So it looks like there's been a small decline in overall sentiment after the recent results - there's been no major change to revenue estimates, but the analysts did make a minor downgrade to their earnings per share forecasts.

The consensus price target held steady at UK£4.34, with the analysts seemingly voting that their lower forecast earnings are not expected to lead to a lower stock price in the foreseeable future. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. There are some variant perceptions on Marshalls, with the most bullish analyst valuing it at UK£8.00 and the most bearish at UK£2.85 per share. As you can see the range of estimates is wide, with the lowest valuation coming in at less than half the most bullish estimate, suggesting there are some strongly diverging views on how analysts think this business will perform. As a result it might not be a great idea to make decisions based on the consensus price target, which is after all just an average of this wide range of estimates.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Marshalls' past performance and to peers in the same industry. The analysts are definitely expecting Marshalls' growth to accelerate, with the forecast 10% annualised growth to the end of 2024 ranking favourably alongside historical growth of 7.7% per annum over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 7.6% annually. Factoring in the forecast acceleration in revenue, it's pretty clear that Marshalls is expected to grow much faster than its industry.

The Bottom Line

The most important thing to take away is that the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. Happily, there were no major changes to revenue forecasts, with the business still expected to grow faster 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 Marshalls. Long-term earnings power is much more important than next year's profits. We have estimates - from multiple Marshalls analysts - going out to 2026, and you can see them free on our platform here.

We don't want to rain on the parade too much, but we did also find 1 warning sign for Marshalls that you need to be mindful 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.