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Analysts Have Been Trimming Their Columbia Sportswear Company Price Target After Its Latest Report

Simply Wall St
·4 mins read

Last week, you might have seen that Columbia Sportswear Company (NASDAQ:COLM) released its full-year result to the market. The early response was not positive, with shares down 3.7% to US$90.45 in the past week. Results were roughly in line with estimates, with revenues of US$3.0b and statutory earnings per share of US$4.83. This is an important time for investors, as they can track a company's performance in its report, look at what top analysts are forecasting for next year, and see if there has been any change to expectations for the business. So we gathered the latest post-earnings forecasts to see what analysts' statutory forecasts suggest is in store for next year.

Check out our latest analysis for Columbia Sportswear

NasdaqGS:COLM Past and Future Earnings, February 8th 2020
NasdaqGS:COLM Past and Future Earnings, February 8th 2020

After the latest results, the ten analysts covering Columbia Sportswear are now predicting revenues of US$3.21b in 2020. If met, this would reflect a satisfactory 5.5% improvement in sales compared to the last 12 months. Statutory per share are forecast to be US$4.79, approximately in line with the last 12 months. Yet prior to the latest earnings, analysts had been forecasting revenues of US$3.24b and earnings per share (EPS) of US$5.07 in 2020. Analysts seem to have become a little more negative on the business after the latest results, given the minor downgrade to their earnings per share forecasts for next year.

It might be a surprise to learn that the consensus price target fell 6.8% to US$106, with analysts clearly linking lower forecast earnings to the performance of the stock price. The consensus price target just an average of individual analyst targets, so - considering that the price target changed, it would be handy to see how wide the range of underlying estimates is. The most optimistic Columbia Sportswear analyst has a price target of US$129 per share, while the most pessimistic values it at US$88.00. 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.

One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. Next year brings more of the same, according to analysts, with revenue forecast to grow 5.5%, in line with its 6.7% annual growth over the past five years. Compare this with the wider market (in aggregate), which analyst estimates suggest will see revenues fall 7.1% next year. So it's pretty clear that Columbia Sportswear is expected to grow slower than similar companies in the same market.

The Bottom Line

The most important thing to take away is that analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. On the plus side, there were no major changes to revenue estimates; although analyst forecasts imply revenues will perform worse than the wider market. The consensus price target fell measurably, with analysts seemingly not reassured by the latest results, leading to a lower estimate of Columbia Sportswear's future valuation.

Still, the long-term prospects of the business are much more relevant than next year's earnings. We have estimates - from multiple Columbia Sportswear analysts - going out to 2024, and you can see them free on our platform here.

You can also see our analysis of Columbia Sportswear's Board and CEO remuneration and experience, and whether company insiders have been buying stock.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. 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. Simply Wall St has no position in the stocks mentioned.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Thank you for reading.