Analysts Are Updating Their SJW Group (NYSE:SJW) Estimates After Its Second-Quarter Results
Last week, you might have seen that SJW Group (NYSE:SJW) released its quarterly result to the market. The early response was not positive, with shares down 3.0% to US$70.09 in the past week. Results look mixed - while revenue fell marginally short of analyst estimates at US$157m, statutory earnings beat expectations 2.9%, with SJW Group reporting profits of US$0.58 per share. 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.
View our latest analysis for SJW Group
Taking into account the latest results, SJW Group's five analysts currently expect revenues in 2023 to be US$651.0m, approximately in line with the last 12 months. Statutory earnings per share are forecast to decline 11% to US$2.47 in the same period. In the lead-up to this report, the analysts had been modelling revenues of US$644.6m and earnings per share (EPS) of US$2.47 in 2023. So it's pretty clear that, although the analysts have updated their estimates, there's been no major change in expectations for the business following the latest results.
There were no changes to revenue or earnings estimates or the price target of US$80.80, suggesting that the company has met expectations in its recent result. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. The most optimistic SJW Group analyst has a price target of US$93.00 per share, while the most pessimistic values it at US$72.00. Even so, with a relatively close grouping of estimates, it looks like the analysts are quite confident in their valuations, suggesting SJW Group is an easy business to forecast or the the analysts are all using similar assumptions.
Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. We would highlight that SJW Group's revenue growth is expected to slow, with the forecast 3.0% annualised growth rate until the end of 2023 being well below the historical 11% p.a. growth over the last five years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 6.0% annually. So it's pretty clear that, while revenue growth is expected to slow down, the wider industry is also expected to grow faster than SJW Group.
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, the analysts also reconfirmed their revenue estimates, suggesting that it's tracking in line with expectations. Although our data does suggest that SJW Group's revenue is expected to perform worse than the wider industry. The consensus price target held steady at US$80.80, 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 estimates - from multiple SJW Group analysts - going out to 2025, and you can see them free on our platform here.
Don't forget that there may still be risks. For instance, we've identified 3 warning signs for SJW Group (1 makes us a bit uncomfortable) you should be aware of.
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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.
