Investors in DFI Retail Group Holdings Limited (SGX:D01) had a good week, as its shares rose 3.4% to close at US$2.14 following the release of its full-year results. It looks like a pretty bad result, all things considered. Although revenues of US$9.2b were in line with analyst predictions, statutory earnings fell badly short, missing estimates by 78% to hit US$0.024 per share. 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. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.
Following last week's earnings report, DFI Retail Group Holdings' seven analysts are forecasting 2024 revenues to be US$9.29b, approximately in line with the last 12 months. Statutory earnings per share are predicted to jump 543% to US$0.15. In the lead-up to this report, the analysts had been modelling revenues of US$9.44b and earnings per share (EPS) of US$0.18 in 2024. The analysts seem to have become more bearish following the latest results. While there were no changes to revenue forecasts, there was a real cut to EPS estimates.
The consensus price target held steady at US$2.92, with the analysts seemingly voting that their lower forecast earnings are not expected to lead to a lower stock price in the foreseeable future. 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. Currently, the most bullish analyst values DFI Retail Group Holdings at US$3.49 per share, while the most bearish prices it at US$2.30. There are definitely some different views on the stock, but the range of estimates is not wide enough as to imply that the situation is unforecastable, in our view.
Of course, another way to look at these forecasts is to place them into context against the industry itself. From these estimates it looks as though the analysts expect the years of declining revenue to come to an end, given the flat forecast out to 2024. That would be a definite improvement, given that the past five years have seen revenue shrink 6.0% annually. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenue grow 8.0% per year. So it's pretty clear that, although revenues are improving, DFI Retail Group Holdings is still expected to grow slower than the industry.
The Bottom Line
The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for DFI Retail Group Holdings. On the plus side, there were no major changes to revenue estimates; although forecasts imply they will 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 in mind, we wouldn't be too quick to come to a conclusion on DFI Retail Group Holdings. Long-term earnings power is much more important than next year's profits. We have forecasts for DFI Retail Group Holdings going out to 2026, and you can see them free on our platform here.
Don't forget that there may still be risks. For instance, we've identified 1 warning sign for DFI Retail Group Holdings that you should be aware of.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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.