Investors in Just Group plc (LON:JUST) had a good week, as its shares rose 5.4% to close at UK£0.76 following the release of its half-yearly results. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

Check out our latest analysis for Just Group  earnings-and-revenue-growth

Taking into account the latest results, the current consensus from Just Group's four analysts is for revenues of UK£3.19b in 2022, which would reflect a substantial 12,122% increase on its sales over the past 12 months. Losses are predicted to fall substantially, shrinking 58% to UK£0.075. Yet prior to the latest earnings, the analysts had been forecasting revenues of UK£3.34b and losses of UK£0.12 per share in 2022. While the revenue estimates fell, sentiment seems to have improved, with the analysts making a very promising decrease in losses per share in particular.

The analysts have cut their price target 7.4% to UK£1.16per share, suggesting that the declining revenue was a more crucial indicator than the forecast reduction in losses. 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. There are some variant perceptions on Just Group, with the most bullish analyst valuing it at UK£1.55 and the most bearish at UK£0.80 per share. Note the wide gap in analyst price targets? This implies to us that there is a fairly broad range of possible scenarios for the underlying business.

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. For example, we noticed that Just Group's rate of growth is expected to accelerate meaningfully, with revenues forecast to exhibit exponential growth to the end of 2022 on an annualised basis. That is well above its historical decline of 6.1% a year over the past five years. Compare this against analyst estimates for the broader industry, which suggest that (in aggregate) industry revenues are expected to grow 21% annually. Not only are Just Group's revenues expected to improve, it seems that the analysts are also expecting it to grow faster than the wider industry.



The Bottom Line

The most obvious conclusion is that the analysts made no changes to their forecasts for a loss next year. They also downgraded their revenue estimates, although industry data suggests that Just Group's revenues are expected to grow faster than the wider industry. Even so, earnings are more important to the intrinsic value of the business. The consensus price target fell measurably, with the analysts seemingly not reassured by the latest results, leading to a lower estimate of Just Group's future valuation.

With that in mind, we wouldn't be too quick to come to a conclusion on Just Group. Long-term earnings power is much more important than next year's profits. At Simply Wall St, we have a full range of analyst estimates for Just Group going out to 2024, and you can see them free on our platform here..

You can also see our  analysis of Just Group's Board and CEO remuneration and experience, and whether company insiders have been buying stock.

Have feedback on this article? Concerned about the content?Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.

Join A Paid User Research Session
You’ll receive a US$30 Amazon Gift card for 1 hour of your time while helping us build better investing tools for the individual investors like yourself. Sign up here