Analyst Estimates: Here's What Brokers Think Of Kingspan Group plc (ISE:KRX) After Its Annual Report

It's been a pretty great week for Kingspan Group plc (ISE:KRX) shareholders, with its shares surging 12% to €61.00 in the week since its latest yearly results. It was a credible result overall, with revenues of €4.6b and statutory earnings per share of €2.04 both in line with analyst estimates, showing that Kingspan Group is executing in line with 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've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.

See our latest analysis for Kingspan Group

Taking into account the latest results, the most recent consensus for Kingspan Group from ten analysts is for revenues of €5.10b in 2021 which, if met, would be a meaningful 11% increase on its sales over the past 12 months. Statutory earnings per share are predicted to increase 5.5% to €2.18. In the lead-up to this report, the analysts had been modelling revenues of €4.95b and earnings per share (EPS) of €2.16 in 2021. There doesn't appear to have been a major change in sentiment following the results, other than the modest lift to revenue estimates.

Even though revenue forecasts increased, there was no change to the consensus price target of €70.97, suggesting the analysts are focused on earnings as the driver of value creation. 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 Kingspan Group, with the most bullish analyst valuing it at €90.00 and the most bearish at €58.00 per share. 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. We can infer from the latest estimates that forecasts expect a continuation of Kingspan Group'shistorical trends, as next year's 11% revenue growth is roughly in line with 11% annual revenue growth over the past five years. Compare this with the wider industry, which analyst estimates (in aggregate) suggest will see revenues grow 4.8% next year. So although Kingspan Group is expected to maintain its revenue growth rate, it's definitely expected to grow faster than the wider industry.

The Bottom Line

The most obvious conclusion is that there's been no major change in the business' prospects in recent times, with the analysts holding their earnings forecasts steady, in line with previous estimates. Pleasantly, they also upgraded their revenue estimates, and their forecasts suggest the business 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. At Simply Wall St, we have a full range of analyst estimates for Kingspan Group going out to 2025, and you can see them free on our platform here..

And what about risks? Every company has them, and we've spotted 2 warning signs for Kingspan Group you should know about.

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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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