John Wiley & Sons, Inc. (NYSE:WLY) Analysts Are Reducing Their Forecasts For This Year

The analysts covering John Wiley & Sons, Inc. (NYSE:WLY) delivered a dose of negativity to shareholders today, by making a substantial revision to their statutory forecasts for this year. Both revenue and earnings per share (EPS) forecasts went under the knife, suggesting the analysts have soured majorly on the business.

Following the latest downgrade, the current consensus, from the dual analysts covering John Wiley & Sons, is for revenues of US$1.8b in 2024, which would reflect a not inconsiderable 13% reduction in John Wiley & Sons' sales over the past 12 months. Statutory earnings per share are presumed to jump 209% to US$0.96. Previously, the analysts had been modelling revenues of US$2.1b and earnings per share (EPS) of US$2.39 in 2024. Indeed, we can see that the analysts are a lot more bearish about John Wiley & Sons' prospects, administering a substantial drop in revenue estimates and slashing their EPS estimates to boot.

View our latest analysis for John Wiley & Sons

Analysts made no major changes to their price target of US$48.00, suggesting the downgrades are not expected to have a long-term impact on John Wiley & Sons' valuation. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. The most optimistic John Wiley & Sons analyst has a price target of US$51.00 per share, while the most pessimistic values it at US$45.00. With such a narrow range of valuations, analysts apparently share similar views on what they think the business is worth.

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. These estimates imply that sales are expected to slow, with a forecast annualised revenue decline of 13% by the end of 2024. This indicates a significant reduction from annual growth of 3.6% over the last five years. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 3.6% per year. It's pretty clear that John Wiley & Sons' revenues are expected to perform substantially worse than the wider industry.

The Bottom Line

The biggest issue in the new estimates is that analysts have reduced their earnings per share estimates, suggesting business headwinds lay ahead for John Wiley & Sons. Unfortunately analysts also downgraded their revenue estimates, and industry data suggests that John Wiley & Sons' revenues are expected to grow slower than the wider market. We're also surprised to see that the price target went unchanged. Still, deteriorating business conditions (assuming accurate forecasts!) can be a leading indicator for the stock price, so we wouldn't blame investors for being more cautious on John Wiley & Sons after the downgrade.

Unfortunately, the earnings downgrade - if accurate - may also place pressure on John Wiley & Sons' mountain of debt, which could lead to some belt tightening for shareholders. See why we're concerned about John Wiley & Sons' balance sheet by visiting our risks dashboard for free on our platform here.

Another thing to consider is whether management and directors have been buying or selling stock recently. We provide an overview of all open market stock trades for the last twelve months on our platform, here.

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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.