Shareholders might have noticed that TalkTalk Telecom Group PLC (LON:TALK) filed its full-year result this time last week. The early response was not positive, with shares down 5.1% to UK£0.94 in the past week. Revenues were UK£1.6b, approximately in line with whatthe analysts expected, although statutory earnings per share (EPS) crushed expectations, coming in at UK£0.13, an impressive 469% ahead of estimates. 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. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on TalkTalk Telecom Group after the latest results.
View our latest analysis for TalkTalk Telecom Group
Following last week's earnings report, TalkTalk Telecom Group's twelve analysts are forecasting 2021 revenues to be UK£1.56b, approximately in line with the last 12 months. Statutory earnings per share are expected to dive 60% to UK£0.054 in the same period. In the lead-up to this report, the analysts had been modelling revenues of UK£1.57b and earnings per share (EPS) of UK£0.048 in 2021. There was no real change to the revenue estimates, but the analysts do seem more bullish on earnings, given the substantial gain in earnings per share expectations following these results.
There's been no major changes to the consensus price target of UK£0.98, suggesting that the improved earnings per share outlook is not enough to have a long-term positive impact on the stock's valuation. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. The most optimistic TalkTalk Telecom Group analyst has a price target of UK£2.00 per share, while the most pessimistic values it at UK£0.60. We would probably assign less value to the analyst forecasts in this situation, because such a wide range of estimates could imply that the future of this business is difficult to value accurately. 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.
One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. One thing that stands out from these estimates is that shrinking revenues are expected to moderate from the historical decline of 3.4% per annum over the past five years.
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 TalkTalk Telecom Group following these results. On the plus side, there were no major changes to revenue estimates; although forecasts imply revenues will perform worse than the wider industry. The consensus price target held steady at UK£0.98, with the latest estimates not enough to have an impact on their price targets.
With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have forecasts for TalkTalk Telecom Group going out to 2025, and you can see them free on our platform here.
You should always think about risks though. Case in point, we've spotted 4 warning signs for TalkTalk Telecom Group you should be aware of, and 2 of them shouldn't be ignored.
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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. Thank you for reading.
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Results: TalkTalk Telecom Group PLC Beat Earnings Expectations And Analysts Now Have New Forecasts - Yahoo Finance
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