Analysts Just Made A Major Revision To Their Jones Lang LaSalle Incorporated (NYSE:JLL) Revenue Forecasts

Today is shaping up negative for Jones Lang LaSalle Incorporated (NYSE:JLL) shareholders, with the analysts delivering a substantial negative revision to this year's forecasts. Revenue estimates were cut sharply as the analysts signalled a weaker outlook - perhaps a sign that investors should temper their expectations as well.

Following the downgrade, the consensus from six analysts covering Jones Lang LaSalle is for revenues of US$10b in 2022, implying an uneasy 13% decline in sales compared to the last 12 months. Statutory earnings per share are supposed to decrease 8.2% to US$18.57 in the same period. Prior to this update, the analysts had been forecasting revenues of US$12b and earnings per share (EPS) of US$18.62 in 2022. So there's been a clear change in analyst sentiment in the recent update, with the analysts making a measurable cut to revenues and reconfirming their earnings per share estimates.

Check out our latest analysis for Jones Lang LaSalle

The consensus has reconfirmed its price target of US$275, showing that the analysts don't expect weaker sales expectationsthis year to have a material impact on Jones Lang LaSalle's market value. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. Currently, the most bullish analyst values Jones Lang LaSalle at US$335 per share, while the most bearish prices it at US$213. There are definitely some different views on the stock, but the range of estimates is not wide enough as to imply that the situation is unforecastable, in our view.

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 would highlight that sales are expected to reverse, with a forecast 17% annualised revenue decline to the end of 2022. That is a notable change from historical growth of 9.0% 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 5.9% annually for the foreseeable future. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Jones Lang LaSalle is expected to lag the wider industry.

The Bottom Line

The most obvious conclusion from this consensus update is that there's been no major change in the business' prospects in recent times, with analysts holding earnings per share steady, in line with previous estimates. Unfortunately analysts also downgraded their revenue estimates, and industry data suggests that Jones Lang LaSalle's revenues are expected to grow slower than the wider market. Often, one downgrade can set off a daisy-chain of cuts, especially if an industry is in decline. So we wouldn't be surprised if the market became a lot more cautious on Jones Lang LaSalle after today.

Even so, the longer term trajectory of the business is much more important for the value creation of shareholders. At Simply Wall St, we have a full range of analyst estimates for Jones Lang LaSalle going out to 2023, and you can see them free on our platform here.

Of course, seeing company management invest large sums of money in a stock can be just as useful as knowing whether analysts are downgrading their estimates. So you may also wish to search this free list of stocks that insiders are buying.

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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.