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Celebrations may be in order for Mortgage Advice Bureau (Holdings) plc (LON:MAB1) shareholders, with the analysts delivering a significant upgrade to their statutory estimates for the company. Consensus estimates suggest investors could expect greatly increased statutory revenues and earnings per share, with the analysts modelling a real improvement in business performance.
Following the upgrade, the consensus from three analysts covering Mortgage Advice Bureau (Holdings) is for revenues of UK£131m in 2020, implying an uncomfortable 10% decline in sales compared to the last 12 months. Statutory earnings per share are supposed to tumble 22% to UK£0.21 in the same period. Previously, the analysts had been modelling revenues of UK£114m and earnings per share (EPS) of UK£0.18 in 2020. So we can see there's been a pretty clear increase in analyst sentiment in recent times, with both revenues and earnings per share receiving a decent lift in the latest estimates.
View our latest analysis for Mortgage Advice Bureau (Holdings)
It will come as no surprise to learn that the analysts have increased their price target for Mortgage Advice Bureau (Holdings) 27% to UK£7.93 on the back of these upgrades. 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. The most optimistic Mortgage Advice Bureau (Holdings) analyst has a price target of UK£8.00 per share, while the most pessimistic values it at UK£7.80. Even so, with a relatively close grouping of estimates, it looks like the analysts are quite confident in their valuations, suggesting Mortgage Advice Bureau (Holdings) is an easy business to forecast or the underlying assumptions are obvious.
Of course, another way to look at these forecasts is to place them into context against the industry itself. These estimates imply that sales are expected to slow, with a forecast revenue decline of 10%, a significant reduction from annual growth of 15% 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 10% next year. It's pretty clear that Mortgage Advice Bureau (Holdings)'s revenues are expected to perform substantially worse than the wider industry.
The Bottom Line
The biggest takeaway for us from these new estimates is that analysts upgraded their earnings per share estimates, with improved earnings power expected for this year. Fortunately, they also upgraded their revenue estimates, and are forecasting revenues to grow slower than the wider market. With a serious upgrade to expectations and a rising price target, it might be time to take another look at Mortgage Advice Bureau (Holdings).