Yahoo Finance Southern Cross Media Group Limited Just Beat Revenue Estimates By 6.5%
Last week saw the newest interim earnings release from Southern Cross Media Group Limited (ASX:SXL), an important milestone in the company's journey to build a stronger business. Results overall were respectable, with statutory earnings of AU$0.18 per share roughly in line with what the analysts had forecast. Revenues of AU$258m came in 6.5% ahead of analyst predictions. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Southern Cross Media Group after the latest results.
Check out our latest analysis for Southern Cross Media Group
After the latest results, the six analysts covering Southern Cross Media Group are now predicting revenues of AU$536.6m in 2021. If met, this would reflect a notable 9.4% improvement in sales compared to the last 12 months. Statutory earnings per share are expected to dip 6.5% to AU$0.16 in the same period. Before this earnings report, the analysts had been forecasting revenues of AU$519.3m and earnings per share (EPS) of AU$0.13 in 2021. So it seems there's been a definite increase in optimism about Southern Cross Media Group's future following the latest results, with a very substantial lift in the earnings per share forecasts in particular.
Althoughthe analysts have upgraded their earnings estimates, there was no change to the consensus price target of AU$2.49, suggesting that the forecast performance does not have a long term impact on the company's valuation. 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 Southern Cross Media Group, with the most bullish analyst valuing it at AU$3.80 and the most bearish at AU$1.40 per share. Note the wide gap in analyst price targets? This implies to us that there is a fairly broad range of possible scenarios for the underlying business.
These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Southern Cross Media Group's past performance and to peers in the same industry. For example, we noticed that Southern Cross Media Group's rate of growth is expected to accelerate meaningfully, with revenues forecast to grow 9.4%, well above its historical decline of 3.5% a year over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in the industry are forecast to see their revenue grow 4.8% per year. So it looks like Southern Cross Media Group is expected to grow faster than its competitors, at least for a while.
The Bottom Line
The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around Southern Cross Media Group's earnings potential next year. Happily, they also upgraded their revenue estimates, and are forecasting revenues to grow faster than the wider industry. The consensus price target held steady at AU$2.49, with the latest estimates not enough to have an impact on their price targets.
With that in mind, we wouldn't be too quick to come to a conclusion on Southern Cross Media 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 Southern Cross Media Group going out to 2023, and you can see them free on our platform here..
Even so, be aware that Southern Cross Media Group is showing 2 warning signs in our investment analysis , and 1 of those is significant...
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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