News Flash: Analysts Just Made A Meaningful Upgrade To Their LSL Property Services plc (LON:LSL) Forecasts

LSL Property Services plc (LON:LSL) shareholders will have a reason to smile today, with the analysts making substantial upgrades to this year's forecasts. The analysts greatly increased their revenue estimates, suggesting a stark improvement in business fundamentals.

Following this upgrade, LSL Property Services' two analysts are forecasting 2020 revenues to be UK£273m, approximately in line with the last 12 months. Per-share earnings are expected to climb 18% to UK£0.20. Previously, the analysts had been modelling revenues of UK£247m and earnings per share (EPS) of UK£0.12 in 2020. There has definitely been an improvement in perception recently, with the analysts substantially increasing both their earnings and revenue estimates.

View our latest analysis for LSL Property Services

With these upgrades, we're not surprised to see that the analysts have lifted their price target 7.0% to UK£2.65 per share. 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. Currently, the most bullish analyst values LSL Property Services at UK£3.42 per share, while the most bearish prices it at UK£2.10. 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.

Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. The analysts are definitely expecting LSL Property Services' growth to accelerate, with the forecast 0.5% growth ranking favourably alongside historical growth of 0.4% 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 0.9% per year. So it's clear that despite the acceleration in growth, LSL Property Services is expected to grow meaningfully slower than the industry average.

The Bottom Line

The biggest takeaway for us from these new estimates is that analysts upgraded their earnings per share estimates, with improved earnings power expected for this year. Pleasantly, analysts also upgraded their revenue estimates, and their forecasts suggest the business is expected to grow slower than the wider market. Given that the consensus looks almost universally bullish, with a substantial increase to forecasts and a higher price target, LSL Property Services could be worth investigating further.

Still, the long-term prospects of the business are much more relevant than next year's earnings. We have analyst estimates for LSL Property Services going out as far as 2023, and you can see them free on our platform here.

Of course, seeing company management invest large sums of money in a stock can be just as useful as knowing whether analysts are upgrading their estimates. So you may also wish to search this free list of stocks that insiders are buying.

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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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