It's been a pretty great week for DBS Group Holdings Ltd (SGX:D05) shareholders, with its shares surging 11% to S$22.49 in the week since its latest quarterly results. The results were positive, with revenue coming in at S$3.6b, beating analyst expectations by 3.8%. 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. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on DBS Group Holdings after the latest results.
Taking into account the latest results, the consensus forecast from DBS Group Holdings' 17 analysts is for revenues of S$14.4b in 2021, which would reflect a decent 18% improvement in sales compared to the last 12 months. Statutory earnings per share are forecast to reduce 2.7% to S$2.08 in the same period. Before this earnings report, the analysts had been forecasting revenues of S$14.4b and earnings per share (EPS) of S$2.01 in 2021. The analysts seems to have become more bullish on the business, judging by their new earnings per share estimates.
The analysts have been lifting their price targets on the back of the earnings upgrade, with the consensus price target rising 5.3% to S$24.10. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. There are some variant perceptions on DBS Group Holdings, with the most bullish analyst valuing it at S$27.10 and the most bearish at S$20.00 per share. The narrow spread of estimates could suggest that the business' future is relatively easy to value, or thatthe analysts have a strong view on its prospects.
Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. The analysts are definitely expecting DBS Group Holdings' growth to accelerate, with the forecast 18% growth ranking favourably alongside historical growth of 7.1% per annum over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 8.3% next year. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect DBS Group Holdings to grow faster than the wider industry.
The Bottom Line
The most important thing here is that the analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards DBS Group Holdings following these results. Happily, there were no major changes to revenue forecasts, with the business still expected to grow faster than the wider industry. We note an upgrade to the price target, suggesting that the analysts believes the intrinsic value of the business is likely to improve over time.
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 DBS Group Holdings going out to 2022, and you can see them free on our platform here..
However, before you get too enthused, we've discovered 1 warning sign for DBS Group Holdings that you should be aware of.
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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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