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Shareholders of NatWest Group plc (LON:NWG) will be pleased this week, given that the stock price is up 10% to UK£2.30 following its latest full-year results. It looks like a credible result overall - although revenues of UK£14b were in line with what the analysts predicted, NatWest Group surprised by delivering a statutory profit of UK£0.48 per share, a notable 13% above expectations. 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. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.
View our latest analysis for NatWest Group
Taking into account the latest results, the current consensus, from the 17 analysts covering NatWest Group, is for revenues of UK£13.7b in 2024. This implies a discernible 3.4% reduction in NatWest Group's revenue over the past 12 months. Statutory earnings per share are forecast to dive 29% to UK£0.37 in the same period. Before this earnings report, the analysts had been forecasting revenues of UK£13.9b and earnings per share (EPS) of UK£0.37 in 2024. The consensus analysts don't seem to have seen anything in these results that would have changed their view on the business, given there's been no major change to their estimates.
It will come as no surprise then, to learn that the consensus price target is largely unchanged at UK£2.84. 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. There are some variant perceptions on NatWest Group, with the most bullish analyst valuing it at UK£5.00 and the most bearish at UK£1.40 per share. As you can see the range of estimates is wide, with the lowest valuation coming in at less than half the most bullish estimate, suggesting there are some strongly diverging views on how analysts think this business will perform. With this in mind, we wouldn't rely too heavily the consensus price target, as it is just an average and analysts clearly have some deeply divergent views on the business.
Of course, another way to look at these forecasts is to place them into context against the industry itself. These estimates imply that revenue is expected to slow, with a forecast annualised decline of 3.4% by the end of 2024. This indicates a significant reduction from annual growth of 4.3% over the last five years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 0.5% annually for the foreseeable future. It's pretty clear that NatWest Group's revenues are expected to perform substantially worse than the wider industry.