Last week, you might have seen that Blue Owl Capital Inc. (NYSE:OWL) released its annual result to the market. The early response was not positive, with shares down 2.9% to US$12.30 in the past week. It was an okay report, and revenues came in at US$824m, approximately in line with analyst estimates leading up to the results announcement. 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 gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.
Taking into account the latest results, the consensus forecast from Blue Owl Capital's six analysts is for revenues of US$1.33b in 2022, which would reflect a huge 61% improvement in sales compared to the last 12 months. Blue Owl Capital is also expected to turn profitable, with statutory earnings of US$0.60 per share. Before this earnings report, the analysts had been forecasting revenues of US$1.35b and earnings per share (EPS) of US$0.45 in 2022. Although the revenue estimates have not really changed, we can see there's been a sizeable expansion in earnings per share expectations, suggesting that the analysts have become more bullish after the latest result.
There's been no major changes to the consensus price target of US$18.10, suggesting that the improved earnings per share outlook is not enough to have a long-term positive impact on the stock's valuation. 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 Blue Owl Capital at US$20.00 per share, while the most bearish prices it at US$16.00. 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.
Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. It's clear from the latest estimates that Blue Owl Capital's rate of growth is expected to accelerate meaningfully, with the forecast 61% annualised revenue growth to the end of 2022 noticeably faster than its historical growth of 50% p.a. over the past three years. Compare this with other companies in the same industry, which are forecast to grow their revenue 1.9% annually. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect Blue Owl Capital 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 Blue Owl Capital following these results. Happily, there were no major changes to revenue forecasts, with the business still expected to grow faster than the wider industry. The consensus price target held steady at US$18.10, with the latest estimates not enough to have an impact on their price targets.
Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have estimates - from multiple Blue Owl Capital analysts - going out to 2024, 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 Blue Owl Capital you should know about.
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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.