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As you might know, Sanderson Design Group plc (LON:SDG) recently reported its annual numbers. Revenues were UK£112m, approximately in line with expectations, although statutory earnings per share (EPS) performed substantially better. EPS of UK£0.11 were also better than expected, beating analyst predictions by 12%. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.
View our latest analysis for Sanderson Design Group
Taking into account the latest results, the current consensus from Sanderson Design Group's three analysts is for revenues of UK£119.3m in 2023, which would reflect a reasonable 6.3% increase on its sales over the past 12 months. Statutory earnings per share are predicted to increase 5.2% to UK£0.12. In the lead-up to this report, the analysts had been modelling revenues of UK£118.5m and earnings per share (EPS) of UK£0.10 in 2023. Although the revenue estimates have not really changed, we can see there's been a substantial gain in earnings per share expectations, suggesting that the analysts have become more bullish after the latest result.
The consensus price target rose 11% to UK£2.30, suggesting that higher earnings estimates flow through to the stock's valuation as well.
Of course, another way to look at these forecasts is to place them into context against the industry itself. The analysts are definitely expecting Sanderson Design Group's growth to accelerate, with the forecast 6.3% annualised growth to the end of 2023 ranking favourably alongside historical growth of 0.1% per annum over the past five years. Other similar companies in the industry (with analyst coverage) are also forecast to grow their revenue at 6.6% per year. Sanderson Design Group is expected to grow at about the same rate as its industry, so it's not clear that we can draw any conclusions from its growth relative to competitors.
The Bottom Line
The most important thing here is that the analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards Sanderson Design Group following these results. Happily, there were no real changes to sales forecasts, with the business still expected to grow in line with the overall industry. There was also a nice increase in the price target, with the analysts clearly feeling that the intrinsic value of the business is improving.