It's been a good week for Mediclinic International plc (LON:MDC) shareholders, because the company has just released its latest interim results, and the shares gained 4.7% to UK£3.16. Overall the results were a little better than the analysts were expecting, with revenues beating forecasts by 2.3%to hit UK£1.4b. 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. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.
View our latest analysis for Mediclinic International
Following last week's earnings report, Mediclinic International's eight analysts are forecasting 2021 revenues to be UK£2.96b, approximately in line with the last 12 months. Mediclinic International is also expected to turn profitable, with statutory earnings of UK£0.12 per share. In the lead-up to this report, the analysts had been modelling revenues of UK£2.92b and earnings per share (EPS) of UK£0.096 in 2021. Although the revenue estimates have not really changed, we can see there's been a great increase in earnings per share expectations, suggesting that the analysts have become more bullish after the latest result.
There's been no major changes to the consensus price target of UK£3.33, suggesting that the improved earnings per share outlook is not enough to have a long-term positive impact on the stock's valuation. 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 Mediclinic International analyst has a price target of UK£4.30 per share, while the most pessimistic values it at UK£2.80. As you can see, analysts are not all in agreement on the stock's future, but the range of estimates is still reasonably narrow, which could suggest that the outcome is not totally unpredictable.
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. These estimates imply that sales are expected to slow, with a forecast revenue decline of 0.5%, a significant reduction from annual growth of 7.1% over the last five years. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 6.1% next year. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Mediclinic International is expected to lag the wider industry.