BCE Inc. (TSE:BCE) last week reported its latest quarterly results, which makes it a good time for investors to dive in and see if the business is performing in line with expectations. BCE reported CA$5.8b in revenue, roughly in line with analyst forecasts, although statutory earnings per share (EPS) of CA$0.77 beat expectations, being 3.3% higher than what the analysts expected. 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. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.
Taking into account the latest results, the current consensus from BCE's 15 analysts is for revenues of CA$23.7b in 2021, which would reflect a reasonable 2.4% increase on its sales over the past 12 months. Statutory earnings per share are predicted to step up 17% to CA$3.18. In the lead-up to this report, the analysts had been modelling revenues of CA$23.7b and earnings per share (EPS) of CA$3.20 in 2021. The consensus analysts don't seem to have seen anything in these results that would have changed their view on the business, given there's been no major change to their estimates.
It will come as no surprise then, to learn that the consensus price target is largely unchanged at CA$59.32. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. There are some variant perceptions on BCE, with the most bullish analyst valuing it at CA$69.00 and the most bearish at CA$45.00 per share. As you can see, analysts are not all in agreement on the stock's future, but the range of estimates is still reasonably narrow, which could suggest that the outcome is not totally unpredictable.
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. Next year brings more of the same, according to the analysts, with revenue forecast to grow 2.4%, in line with its 2.4% annual growth over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenues grow 1.8% per year. So although BCE is expected to maintain its revenue growth rate, it's definitely expected to grow faster than the wider industry.
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. Fortunately, they also reconfirmed their revenue numbers, suggesting sales are tracking in line with expectations - and our data suggests that revenues are expected to grow faster than the wider industry. The consensus price target held steady at CA$59.32, with the latest estimates not enough to have an impact on their price targets.
With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have forecasts for BCE going out to 2024, and you can see them free on our platform here.
You still need to take note of risks, for example - BCE has 2 warning signs (and 1 which is potentially serious) we think you should know about.
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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