Earnings Release: Here's Why Analysts Cut Their Clicks Group Limited (JSE:CLS) Price Target To R283
Shareholders might have noticed that Clicks Group Limited (JSE:CLS) filed its annual result this time last week. The early response was not positive, with shares down 9.8% to R217 in the past week. It was an okay report, and revenues came in at R50b, approximately in line with analyst estimates leading up to the results announcement. 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. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.
Taking into account the latest results, the current consensus from Clicks Group's seven analysts is for revenues of R53.5b in 2027. This would reflect an okay 6.1% increase on its revenue over the past 12 months. Statutory earnings per share are predicted to increase 8.1% to R15.48. In the lead-up to this report, the analysts had been modelling revenues of R55.1b and earnings per share (EPS) of R15.70 in 2027. The consensus seems maybe a little more pessimistic, trimming their revenue forecasts after the latest results even though there was no change to its EPS estimates.
See our latest analysis for Clicks Group
It will come as no surprise then, that the consensus price target fell 5.8% to R283following these changes. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. The most optimistic Clicks Group analyst has a price target of R309 per share, while the most pessimistic values it at R235. The narrow spread of estimates could suggest that the business' future is relatively easy to value, or thatthe analysts have a strong view on its prospects.
These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Clicks Group's past performance and to peers in the same industry. The period to the end of 2027 brings more of the same, according to the analysts, with revenue forecast to display 6.1% growth on an annualised basis. That is in line with its 6.3% annual growth over the past five years. Compare this with the broader industry, which analyst estimates (in aggregate) suggest will see revenues grow 6.9% annually. It's clear that while Clicks Group's revenue growth is expected to continue on its current trajectory, it's only expected to grow in line with the industry itself.
The Bottom Line
The most important thing to take away is that there's been no major change in sentiment, with the analysts reconfirming that the business is performing in line with their previous earnings per share estimates. Sadly, they also downgraded their revenue forecasts, but the business is still expected to grow at roughly the same rate as the industry itself. Even so, earnings are more important to the intrinsic value of the business. Furthermore, the analysts also cut their price targets, suggesting that the latest news has led to greater pessimism about the intrinsic value of the business.
With that in mind, we wouldn't be too quick to come to a conclusion on Clicks Group. Long-term earnings power is much more important than next year's profits. At Simply Wall St, we have a full range of analyst estimates for Clicks Group going out to 2029, and you can see them free on our platform here..
Another thing to consider is whether management and directors have been buying or selling stock recently. We provide an overview of all open market stock trades for the last twelve months on our platform, here.
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