C.H. Robinson Worldwide, Inc. (NASDAQ:CHRW) investors will be delighted, with the company turning in some strong numbers with its latest results. The company beat expectations with revenues of US$4.2b arriving 7.0% ahead of forecasts. Statutory earnings per share (EPS) were US$1.00, 3.0% ahead of estimates. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.
Taking into account the latest results, the consensus forecast from C.H. Robinson Worldwide's 19 analysts is for revenues of US$16.6b in 2021, which would reflect a credible 7.3% improvement in sales compared to the last 12 months. Per-share earnings are expected to jump 25% to US$4.23. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$16.2b and earnings per share (EPS) of US$4.28 in 2021. There doesn't appear to have been a major change in sentiment following the results, other than the small lift in revenue estimates.
Even though revenue forecasts increased, the consensus price target 6.6% to US$92.42, perhaps suggesting thatthe analysts have become more pessimistic about the lack of earnings growth. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. The most optimistic C.H. Robinson Worldwide analyst has a price target of US$120 per share, while the most pessimistic values it at US$53.00. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the business.
Of course, another way to look at these forecasts is to place them into context against the industry itself. The analysts are definitely expecting C.H. Robinson Worldwide's growth to accelerate, with the forecast 7.3% growth ranking favourably alongside historical growth of 4.3% per annum over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 6.2% next year. C.H. Robinson Worldwide 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 important thing to take away is that there's been no major change in sentiment, with the analysts reconfirming that the business is performing in line with their previous earnings per share estimates. They also upgraded their revenue forecasts, although the latest estimates suggest that C.H. Robinson Worldwide will grow in line with the overall industry. The consensus price target fell measurably, with the analysts seemingly not reassured by the latest results, leading to a lower estimate of C.H. Robinson Worldwide's future valuation.
Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have forecasts for C.H. Robinson Worldwide going out to 2022, 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 C.H. Robinson Worldwide that you should be aware of.
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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