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Shareholders will be ecstatic, with their stake up 24% over the past week following Victrex plc's (LON:VCT) latest annual results. It looks like a pretty bad result, all things considered. Although revenues of UK£291m were in line with analyst predictions, statutory earnings fell badly short, missing estimates by 42% to hit UK£0.20 per share. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.
Check out our latest analysis for Victrex
Taking into account the latest results, the consensus forecast from Victrex's eight analysts is for revenues of UK£303.9m in 2025. This reflects a credible 4.4% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to surge 204% to UK£0.60. Before this earnings report, the analysts had been forecasting revenues of UK£312.0m and earnings per share (EPS) of UK£0.71 in 2025. From this we can that sentiment has definitely become more bearish after the latest results, leading to lower revenue forecasts and a real cut to earnings per share estimates.
Despite the cuts to forecast earnings, there was no real change to the UK£12.29 price target, showing that the analysts don't think the changes have a meaningful impact on its intrinsic value. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. The most optimistic Victrex analyst has a price target of UK£16.80 per share, while the most pessimistic values it at UK£8.50. Note the wide gap in analyst price targets? This implies to us that there is a fairly broad range of possible scenarios for the underlying business.
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. It's clear from the latest estimates that Victrex's rate of growth is expected to accelerate meaningfully, with the forecast 4.4% annualised revenue growth to the end of 2025 noticeably faster than its historical growth of 1.6% p.a. over the past five years. Compare this with other companies in the same industry, which are forecast to see a revenue decline of 3.5% annually. It seems obvious that as part of the brighter growth outlook, Victrex is expected to grow faster than the wider industry.