Analysts Are Updating Their AIB Group plc (ISE:A5G) Estimates After Its Interim Results

Last week, you might have seen that AIB Group plc (ISE:A5G) released its interim result to the market. The early response was not positive, with shares down 9.5% to €4.85 in the past week. It was a workmanlike result, with revenues of €2.5b coming in 4.5% ahead of expectations, and statutory earnings per share of €0.76, in line with analyst appraisals. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.

See our latest analysis for AIB Group

Taking into account the latest results, AIB Group's ten analysts currently expect revenues in 2024 to be €4.76b, approximately in line with the last 12 months. Statutory earnings per share are expected to sink 17% to €0.77 in the same period. Before this earnings report, the analysts had been forecasting revenues of €4.57b and earnings per share (EPS) of €0.72 in 2024. It looks like there's been a modest increase in sentiment following the latest results, withthe analysts becoming a bit more optimistic in their predictions for both revenues and earnings.

Despite these upgrades,the analysts have not made any major changes to their price target of €6.10, suggesting that the higher estimates are not likely to have a long term impact on what the stock is worth. 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. There are some variant perceptions on AIB Group, with the most bullish analyst valuing it at €7.90 and the most bearish at €4.80 per share. Analysts definitely have varying views on the business, but the spread of estimates is not wide enough in our view to suggest that extreme outcomes could await AIB Group shareholders.

Of course, another way to look at these forecasts is to place them into context against the industry itself. We would highlight that revenue is expected to reverse, with a forecast 3.1% annualised decline to the end of 2024. That is a notable change from historical growth of 20% over the last five years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 2.9% annually for the foreseeable future. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - AIB Group is expected to lag the wider industry.

The Bottom Line

The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around AIB Group's earnings potential next year. They also upgraded their revenue estimates for next year, even though it is expected to grow slower 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.

Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. We have forecasts for AIB Group going out to 2026, and you can see them free on our platform here.

It is also worth noting that we have found 2 warning signs for AIB Group (1 is a bit unpleasant!) that you need to take into consideration.

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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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com