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A week ago, Aviva plc (LON:AV.) came out with a strong set of yearly numbers that could potentially lead to a re-rate of the stock. Aviva delivered a significant beat to revenue and earnings per share (EPS) expectations, with sales hitting UK£46b and statutory EPS reaching UK£0.64, both beating estimates by more than 10%. This is an important time for investors, as they can track a company's performance in its report, look at what top analysts are forecasting for next year, and see if there has been any change to expectations for the business. With this in mind, we've gathered the latest statutory forecasts to see what analysts are expecting for next year.
See our latest analysis for Aviva
Taking into account the latest results, the seven analysts covering Aviva provided consensus estimates of UK£44.3b revenue in 2020, which would reflect a small 3.8% decline on its sales over the past 12 months. Statutory earnings per share are forecast to drop 18% to UK£0.52 in the same period. Before this earnings report, analysts had been forecasting revenues of UK£43.8b and earnings per share (EPS) of UK£0.49 in 2020. Analysts seem to have become more bullish on the business, judging by their new earnings per share estimates.
There's been no major changes to the consensus price target of UK£4.70, 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. Currently, the most bullish analyst values Aviva at UK£5.75 per share, while the most bearish prices it at UK£2.92. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the business.
Another way to assess these estimates is by comparing them to past performance, and seeing whether analysts are more or less bullish relative to other companies in the market. We would highlight that sales are expected to reverse, with the forecast 3.8% revenue decline a notable change from historical growth of 3.2% over the last five years. By contrast, our data suggests that other companies (with analyst coverage) in the market are forecast to see their revenue decline -3.1% annually for the foreseeable future. So it's pretty clear that Aviva's revenues are expected to grow faster than the wider market.