It's been a good week for Manchester United plc (NYSE:MANU) shareholders, because the company has just released its latest full-year results, and the shares gained 2.7% to US$14.18. Revenues of UK£509m were in line with expectations, although statutory losses per share were UK£0.14, some 18% smaller than was expected. The 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. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.
Following the latest results, Manchester United's three analysts are now forecasting revenues of UK£549.1m in 2021. This would be a modest 7.9% improvement in sales compared to the last 12 months. Per-share losses are expected to explode, reaching UK£0.42 per share. Before this latest report, the consensus had been expecting revenues of UK£506.4m and UK£0.18 per share in losses. So it's pretty clear the analysts have mixed opinions on Manchester United even after this update; although they upped their revenue numbers, it came at the cost of a per-share losses.
There was no major change to the consensus price target of UK£13.72, with growing revenues seemingly enough to offset the concern of growing losses. 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. Currently, the most bullish analyst values Manchester United at UK£18.92 per share, while the most bearish prices it at UK£17.00. With such a narrow range of valuations, the analysts apparently share similar views on what they think the business is worth.
Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. It's clear from the latest estimates that Manchester United's rate of growth is expected to accelerate meaningfully, with the forecast 7.9% revenue growth noticeably faster than its historical growth of 5.6%p.a. over the past five years. Compare this with other companies in the same industry, which are forecast to see revenue growth of 15% next year. It seems obvious that, while the future growth outlook is brighter than the recent past, Manchester United is expected to grow slower than the wider industry.
The Bottom Line
The most important thing to note is the forecast of increased losses next year, suggesting all may not be well at Manchester United. Fortunately, they also upgraded their revenue estimates, although our data indicates sales are expected to perform worse than the wider industry. 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 Manchester United going out to 2025, and you can see them free on our platform here..
We don't want to rain on the parade too much, but we did also find 2 warning signs for Manchester United that you need to be mindful of.
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. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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