Victrex plc Just Missed EPS By 5.9%: Here's What Analysts Think Will Happen Next

Shareholders might have noticed that Victrex plc (LON:VCT) filed its annual result this time last week. The early response was not positive, with shares down 6.7% to UK£14.11 in the past week. Revenues of UK£307m were in line with forecasts, although statutory earnings per share (EPS) came in below expectations at UK£0.70, missing estimates by 5.9%. 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. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.

Check out our latest analysis for Victrex

Taking into account the latest results, the current consensus from Victrex's twelve analysts is for revenues of UK£327.5m in 2024. This would reflect a reasonable 6.7% increase on its revenue over the past 12 months. Statutory earnings per share are predicted to ascend 12% to UK£0.79. In the lead-up to this report, the analysts had been modelling revenues of UK£328.6m and earnings per share (EPS) of UK£0.81 in 2024. The consensus analysts don't seem to have seen anything in these results that would have changed their view on the business, given there's been no major change to their estimates.

There were no changes to revenue or earnings estimates or the price target of UK£16.48, suggesting that the company has met expectations in its recent result. 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 Victrex analyst has a price target of UK£20.90 per share, while the most pessimistic values it at UK£12.50. 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.

Of course, another way to look at these forecasts is to place them into context against the industry itself. The analysts are definitely expecting Victrex's growth to accelerate, with the forecast 6.7% annualised growth to the end of 2024 ranking favourably alongside historical growth of 2.0% per annum over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue shrink 4.7% per year. So it's clear with the acceleration in growth, Victrex is expected to grow meaningfully faster than the wider industry.

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. On the plus side, they made no changes to their revenue estimates - and they expect it to perform better than the wider industry. The consensus price target held steady at UK£16.48, with the latest estimates not enough to have an impact on their price targets.

With that in mind, we wouldn't be too quick to come to a conclusion on Victrex. Long-term earnings power is much more important than next year's profits. At Simply Wall St, we have a full range of analyst estimates for Victrex going out to 2026, and you can see them free on our platform here..

However, before you get too enthused, we've discovered 1 warning sign for Victrex that 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.