Earnings Beat: Clarkson PLC Just Beat Analyst Forecasts, And Analysts Have Been Updating Their Models

It's been a good week for Clarkson PLC (LON:CKN) shareholders, because the company has just released its latest yearly results, and the shares gained 7.7% to UK£38.60. The result was positive overall - although revenues of UK£639m were in line with what the analysts predicted, Clarkson surprised by delivering a statutory profit of UK£2.74 per share, modestly greater than expected. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.

Check out our latest analysis for Clarkson

Following last week's earnings report, Clarkson's six analysts are forecasting 2024 revenues to be UK£649.1m, approximately in line with the last 12 months. Statutory earnings per share are forecast to dip 6.5% to UK£2.55 in the same period. Before this earnings report, the analysts had been forecasting revenues of UK£643.0m and earnings per share (EPS) of UK£2.53 in 2024. So it's pretty clear that, although the analysts have updated their estimates, there's been no major change in expectations for the business following the latest results.

There were no changes to revenue or earnings estimates or the price target of UK£44.35, suggesting that the company has met expectations in its recent result. 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. The most optimistic Clarkson analyst has a price target of UK£52.00 per share, while the most pessimistic values it at UK£35.30. This shows there is still a bit of diversity in estimates, but analysts don't appear to be totally split on the stock as though it might be a success or failure situation.

Of course, another way to look at these forecasts is to place them into context against the industry itself. We would highlight that Clarkson's revenue growth is expected to slow, with the forecast 1.5% annualised growth rate until the end of 2024 being well below the historical 16% p.a. growth over the last five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 0.4% annually. Even after the forecast slowdown in growth, it seems obvious that Clarkson is also expected to grow faster than the wider industry.

The Bottom Line

The most important thing to take away is that there's been no major change in sentiment, with the analysts reconfirming that the business is performing in line with their previous earnings per share estimates. 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 said, the long-term trajectory of the company's earnings is a lot more important than next year. We have estimates - from multiple Clarkson analysts - going out to 2026, and you can see them free on our platform here.

That said, it's still necessary to consider the ever-present spectre of investment risk. We've identified 2 warning signs with Clarkson (at least 1 which is concerning) , and understanding these should be part of your investment process.

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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.