Earnings Miss: The Bidvest Group Limited Missed EPS By 8.1% And Analysts Are Revising Their Forecasts

As you might know, The Bidvest Group Limited (JSE:BVT) recently reported its yearly numbers. It looks like the results were a bit of a negative overall. While revenues of R100b were in line with analyst predictions, statutory earnings were less than expected, missing estimates by 8.1% to hit R14.90 per share. 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. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

View our latest analysis for Bidvest Group

Taking into account the latest results, the most recent consensus for Bidvest Group from five analysts is for revenues of R105.8b in 2023 which, if met, would be a reasonable 5.8% increase on its sales over the past 12 months. Per-share earnings are expected to ascend 16% to R17.37. Before this earnings report, the analysts had been forecasting revenues of R103.7b and earnings per share (EPS) of R17.24 in 2023. So it looks like there's been no major change in sentiment following the latest results, although the analysts have made a small lift in to revenue forecasts.

It may not be a surprise to see thatthe analysts have reconfirmed their price target of R255, implying that the uplift in sales is not expected to greatly contribute to Bidvest Group's valuation in the near term. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. The most optimistic Bidvest Group analyst has a price target of R273 per share, while the most pessimistic values it at R240. Even so, with a relatively close grouping of estimates, it looks like the analysts are quite confident in their valuations, suggesting Bidvest Group is an easy business to forecast or the the analysts are all using similar assumptions.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Bidvest Group's past performance and to peers in the same industry. We can infer from the latest estimates that forecasts expect a continuation of Bidvest Group'shistorical trends, as the 5.8% annualised revenue growth to the end of 2023 is roughly in line with the 5.6% annual revenue growth over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenues grow 4.1% per year. So although Bidvest 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. Happily, they also upgraded their revenue estimates, and are forecasting revenues 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 in mind, we wouldn't be too quick to come to a conclusion on Bidvest Group. Long-term earnings power is much more important than next year's profits. We have estimates - from multiple Bidvest Group analysts - 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 Bidvest Group 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.