Earnings Beat: LondonMetric Property Plc Just Beat Analyst Forecasts, And Analysts Have Been Updating Their Models

LondonMetric Property Plc (LON:LMP) defied analyst predictions to release its yearly results, which were ahead of market expectations. The company beat forecasts, with revenue of UK£178m, some 7.2% above estimates, and statutory earnings per share (EPS) coming in at UK£0.11, 108% ahead of expectations. 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. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

Check out our latest analysis for LondonMetric Property

After the latest results, the six analysts covering LondonMetric Property are now predicting revenues of UK£370.1m in 2025. If met, this would reflect a huge 108% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to soar 166% to UK£0.15. Before this earnings report, the analysts had been forecasting revenues of UK£364.6m and earnings per share (EPS) of UK£0.17 in 2025. The analysts seem to have become a little more negative on the business after the latest results, given the minor downgrade to their earnings per share numbers for next year.

The consensus price target held steady at UK£2.23, with the analysts seemingly voting that their lower forecast earnings are not expected to lead to a lower stock price in the foreseeable future. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. The most optimistic LondonMetric Property analyst has a price target of UK£2.50 per share, while the most pessimistic values it at UK£1.86. Even so, with a relatively close grouping of estimates, it looks like the analysts are quite confident in their valuations, suggesting LondonMetric Property is an easy business to forecast or the the analysts are all using similar assumptions.

Of course, another way to look at these forecasts is to place them into context against the industry itself. The analysts are definitely expecting LondonMetric Property's growth to accelerate, with the forecast 108% annualised growth to the end of 2025 ranking favourably alongside historical growth of 13% per annum over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 1.0% per year. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect LondonMetric Property to grow faster than the wider 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. Fortunately, they also reconfirmed their revenue numbers, suggesting that it's tracking in line with expectations. Additionally, our data suggests that revenue is 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 said, the long-term trajectory of the company's earnings is a lot more important than next year. We have forecasts for LondonMetric Property going out to 2027, and you can see them free on our platform here.

You still need to take note of risks, for example - LondonMetric Property has 3 warning signs (and 2 which are concerning) we think you should know about.

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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.