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Premier Investments Limited Earnings Missed Analyst Estimates: Here's What Analysts Are Forecasting Now

As you might know, Premier Investments Limited (ASX:PMV) recently reported its annual numbers. Premier Investments beat revenue expectations by 3.4%, recording sales of AU$1.2b. Statutory earnings per share (EPS) came in at AU$0.87, some 7.1% short of analyst estimates. 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.

View our latest analysis for Premier Investments

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Taking into account the latest results, the consensus forecast from Premier Investments' eight analysts is for revenues of AU$1.30b in 2021, which would reflect a credible 5.5% improvement in sales compared to the last 12 months. Per-share earnings are expected to climb 14% to AU$0.99. In the lead-up to this report, the analysts had been modelling revenues of AU$1.26b and earnings per share (EPS) of AU$0.87 in 2021. So it seems there's been a definite increase in optimism about Premier Investments' future following the latest results, with a solid gain to the earnings per share forecasts in particular.

Despite these upgrades,the analysts have not made any major changes to their price target of AU$19.19, suggesting that the higher estimates are not likely to have a long term impact on what the stock is worth. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. Currently, the most bullish analyst values Premier Investments at AU$22.13 per share, while the most bearish prices it at AU$16.00. This shows there is still a bit of diversity in estimates, but analysts don't appear to be totally split on the stock as though it might be a success or failure situation.

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. We can infer from the latest estimates that forecasts expect a continuation of Premier Investments'historical trends, as next year's 5.5% revenue growth is roughly in line with 5.9% annual revenue growth over the past five years. Juxtapose this against our data, which suggests that other companies (with analyst coverage) in the industry are forecast to see their revenues grow 5.3% per year. It's clear that while Premier Investments' revenue growth is expected to continue on its current trajectory, it's only expected to grow in line with the industry itself.

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 Premier Investments following these results. They also upgraded their revenue forecasts, although the latest estimates suggest that Premier Investments will grow in line with the overall 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 Premier Investments. Long-term earnings power is much more important than next year's profits. We have forecasts for Premier Investments going out to 2025, and you can see them free on our platform here.

However, before you get too enthused, we've discovered 1 warning sign for Premier Investments that you should be aware of.

This article by Simply Wall St is general in nature. 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.

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