Results: Bloomsbury Publishing plc Exceeded Expectations And The Consensus Has Updated Its Estimates

A week ago, Bloomsbury Publishing plc (LON:BMY) came out with a strong set of full-year numbers that could potentially lead to a re-rate of the stock. Results were good overall, with revenues beating analyst predictions by 3.0% to hit UK£185m. Statutory earnings per share (EPS) came in at UK£0.17, some 9.9% above whatthe analysts had expected. 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. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.

Check out our latest analysis for Bloomsbury Publishing

Following the recent earnings report, the consensus from three analysts covering Bloomsbury Publishing is for revenues of UK£180.8m in 2022, implying a perceptible 2.3% decline in sales compared to the last 12 months. Statutory earnings per share are expected to shrink 4.9% to UK£0.16 in the same period. Yet prior to the latest earnings, the analysts had been anticipated revenues of UK£177.5m and earnings per share (EPS) of UK£0.14 in 2022. There was no real change to the revenue estimates, but the analysts do seem more bullish on earnings, given the solid gain to earnings per share expectations following these results.

The consensus price target rose 9.0% to UK£3.62, suggesting that higher earnings estimates flow through to the stock's valuation as well. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. There are some variant perceptions on Bloomsbury Publishing, with the most bullish analyst valuing it at UK£3.70 and the most bearish at UK£3.25 per share. The narrow spread of estimates could suggest that the business' future is relatively easy to value, or thatthe analysts have a strong view on its prospects.

One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. We would highlight that sales are expected to reverse, with a forecast 2.3% annualised revenue decline to the end of 2022. That is a notable change from historical growth of 5.9% over the last five years. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 7.7% per year. It's pretty clear that Bloomsbury Publishing's revenues are expected to perform substantially worse than 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 Bloomsbury Publishing following these results. On the plus side, there were no major changes to revenue estimates; although forecasts imply revenues will perform worse than the wider industry. There was also a nice increase in the price target, with the analysts clearly feeling that the intrinsic value of the business is improving.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. At Simply Wall St, we have a full range of analyst estimates for Bloomsbury Publishing going out to 2024, and you can see them free on our platform here..

You still need to take note of risks, for example - Bloomsbury Publishing has 1 warning sign we think you should be aware of.

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This article by Simply Wall St is general in nature. 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.
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