It’s been a good week for Brickworks Limited (ASX:BKW) shareholders, because the company has just released its latest annual results, and the shares gained 6.5% to AU$28.53. Revenues were in line with expectations, at AU$1.1b, while statutory losses ballooned to AU$0.88 per share. Earnings are an important time for investors, as they can track a company’s performance, look at what the analysts are forecasting for next year, and see if there’s been a change in sentiment towards the company. Readers will be glad to know we’ve aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Brickworks after the latest results.
View our latest analysis for Brickworks
Following last week’s earnings report, Brickworks’ nine analysts are forecasting 2025 revenues to be AU$1.08b, approximately in line with the last 12 months. Earnings are expected to improve, with Brickworks forecast to report a statutory profit of AU$1.18 per share. Before this earnings report, the analysts had been forecasting revenues of AU$1.09b and earnings per share (EPS) of AU$1.48 in 2025. 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.
It might be a surprise to learn that the consensus price target was broadly unchanged at AU$30.69, with the analysts clearly implying that the forecast decline in earnings is not expected to have much of an impact on 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. There are some variant perceptions on Brickworks, with the most bullish analyst valuing it at AU$36.60 and the most bearish at AU$27.40 per share. This is a very narrow spread of estimates, implying either that Brickworks is an easy company to value, or – more likely – the analysts are relying heavily on some key assumptions.
Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. These estimates imply that revenue is expected to slow, with a forecast annualised decline of 0.8% by the end of 2025. This indicates a significant reduction from annual growth of 5.8% over the last five years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 3.7% annually for the foreseeable future. So although its revenues are forecast to shrink, this cloud does not come with a silver lining – Brickworks is expected to lag the wider industry.
The Bottom Line
The most important thing to take away is that the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting that it’s tracking in line with expectations. Although our data does suggest that Brickworks’ revenue is expected to 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.
Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year’s earnings. At Simply Wall St, we have a full range of analyst estimates for Brickworks going out to 2027, and you can see them free on our platform here..
It might also be worth considering whether Brickworks’ debt load is appropriate, using our debt analysis tools on the Simply Wall St platform, here.
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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.
