Analysts Are Updating Their Telstra Group Limited (ASX:TLS) Estimates After Its Full-Year Results
Telstra Group Limited (ASX:TLS) just released its latest yearly report and things are not looking great. Telstra Group missed analyst forecasts, with revenues of AU$23b and statutory earnings per share (EPS) of AU$0.20, falling short by 3.5% and 3.0% respectively. 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. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.
Taking into account the latest results, the most recent consensus for Telstra Group from 13 analysts is for revenues of AU$23.6b in 2027. If met, it would imply an okay 2.8% increase on its revenue over the past 12 months. Statutory earnings per share are predicted to rise 7.9% to AU$0.22. Before this earnings report, the analysts had been forecasting revenues of AU$24.2b and earnings per share (EPS) of AU$0.22 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 Telstra Group
The consensus has reconfirmed its price target of AU$5.01, showing that the analysts don't expect weaker revenue expectations next year to have a material impact on Telstra Group's market value. 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 Telstra Group at AU$5.50 per share, while the most bearish prices it at AU$4.20. 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.
Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. The analysts are definitely expecting Telstra Group's growth to accelerate, with the forecast 2.8% annualised growth to the end of 2027 ranking favourably alongside historical growth of 2.0% per annum over the past five years. Other similar companies in the industry (with analyst coverage) are also forecast to grow their revenue at 2.8% per year. Telstra Group is expected to grow at about the same rate as its industry, so it's not clear that we can draw any conclusions from its growth relative to competitors.
The Bottom Line
The most obvious conclusion is that there's been no major change in the business' prospects in recent times, with the analysts holding their earnings forecasts steady, in line with previous estimates. They also downgraded their revenue estimates, although as we saw earlier, forecast growth is only expected to be about the same as the wider industry. Still, earnings per share are more important to value creation for shareholders. 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 Telstra Group. Long-term earnings power is much more important than next year's profits. We have estimates - from multiple Telstra Group analysts - going out to 2029, and you can see them free on our platform here.
It is also worth noting that we have found 2 warning signs for Telstra Group that you need to take into consideration.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
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.