Earnings Miss: HT&E Limited Missed EPS And Analysts Are Revising Their Forecasts
Last week, you might have seen that HT&E Limited (ASX:HT1) released its yearly result to the market. The early response was not positive, with shares down 4.0% to AU$1.45 in the past week. Things were not great overall, with a surprise (statutory) loss of AU$0.05 per share on revenues of AU$253m, even though analysts had been expecting a profit. Analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.
View our latest analysis for HT&E
Taking into account the latest results, the five analysts covering HT&E provided consensus estimates of AU$246.0m revenue in 2020, which would reflect a measurable 2.6% decline on its sales over the past 12 months. Earnings are expected to improve, with HT&E forecast to report a statutory profit of AU$0.12 per share. Yet prior to the latest earnings, analysts had been forecasting revenues of AU$255.0m and earnings per share (EPS) of AU$0.14 in 2020. Analysts seem less optimistic after the recent results, reducing their sales forecasts and making a real cut to earnings per share forecasts.
Despite the cuts to forecast earnings, there was no real change to the AU$1.60 price target, showing that analysts don't think the changes have a meaningful impact on the stock's 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. There are some variant perceptions on HT&E, with the most bullish analyst valuing it at AU$1.70 and the most bearish at AU$1.50 per share. Still, with such a tight range of estimates, it suggests analysts have a pretty good idea of what they think the company is worth.
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. Over the past five years, revenues have declined around 22% annually. On the bright side, analysts expect the decline to level off somewhat, with the forecast for a 2.6% decline in revenue next year. By contrast, our data suggests that other companies (with analyst coverage) in the market are forecast to see their revenue decline 3.1% per year. So it's pretty clear that, while it does have declining revenues, at least analysts expect HT&E to suffer less severely than the wider market.
The Bottom Line
The biggest concern with the new estimates is that analysts have reduced their earnings per share estimates, suggesting business headwinds could lay ahead for HT&E. On the negative side, they also downgraded their revenue estimates, and forecasts imply revenues will perform worse than the wider market. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.
With that said, the long-term trajectory of the company's earnings is a lot more important than next year. At Simply Wall St, we have a full range of analyst estimates for HT&E going out to 2022, and you can see them free on our platform here..
We also provide an overview of the HT&E Board and CEO remuneration and length of tenure at the company, and whether insiders have been buying the stock, here.
If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned.
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