What Does The Future Hold For Vodacom Group Limited (JSE:VOD)? These Analysts Have Been Cutting Their Estimates

Today is shaping up negative for Vodacom Group Limited (JSE:VOD) shareholders, with the analysts delivering a substantial negative revision to this year's forecasts. This report focused on revenue estimates, and it looks as though the consensus view of the business has become substantially more conservative.

Following the downgrade, the current consensus from Vodacom Group's eight analysts is for revenues of R115b in 2023 which - if met - would reflect a notable 12% increase on its sales over the past 12 months. Statutory earnings per share are forecast to be R10.12, approximately in line with the last 12 months. Prior to this update, the analysts had been forecasting revenues of R138b and earnings per share (EPS) of R10.02 in 2023. So there's been a clear change in analyst sentiment in the recent update, with the analysts making a substantial drop in revenues and reconfirming their earnings per share estimates.

See our latest analysis for Vodacom Group

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Vodacom Group's past performance and to peers in the same industry. The analysts are definitely expecting Vodacom Group's growth to accelerate, with the forecast 16% annualised growth to the end of 2023 ranking favourably alongside historical growth of 4.6% per annum over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 13% annually. Factoring in the forecast acceleration in revenue, it's pretty clear that Vodacom Group is expected to grow much faster than its industry.

The Bottom Line

The most important thing to take away is that there's been no major change in sentiment, with analysts reconfirming that earnings per share are expected to continue performing in line with their prior expectations. Unfortunately, analysts also downgraded their revenue estimates, although our data indicates revenues are expected to perform better than the wider market. Overall, given the drastic downgrade to this year's forecasts, we'd be feeling a little more wary of Vodacom Group going forwards.

Still, the long-term prospects of the business are much more relevant than next year's earnings. At Simply Wall St, we have a full range of analyst estimates for Vodacom Group going out to 2025, 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.