Earnings Beat: SFL Corporation Ltd. Just Beat Analyst Forecasts, And Analysts Have Been Updating Their Models
It's been a good week for SFL Corporation Ltd. (NYSE:SFL) shareholders, because the company has just released its latest full-year results, and the shares gained 7.8% to US$12.86. Revenues were US$752m, approximately in line with whatthe analysts expected, although statutory earnings per share (EPS) crushed expectations, coming in at US$0.67, an impressive 22% 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. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.
See our latest analysis for SFL
Taking into account the latest results, the consensus forecast from SFL's four analysts is for revenues of US$854.7m in 2024. This reflects a meaningful 14% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to jump 65% to US$1.10. Before this earnings report, the analysts had been forecasting revenues of US$825.6m and earnings per share (EPS) of US$0.97 in 2024. So it seems there's been a definite increase in optimism about SFL's future following the latest results, with a substantial gain in the earnings per share forecasts in particular.
With these upgrades, we're not surprised to see that the analysts have lifted their price target 5.2% to US$12.10per share. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. Currently, the most bullish analyst values SFL at US$13.00 per share, while the most bearish prices it at US$11.50. Even so, with a relatively close grouping of estimates, it looks like the analysts are quite confident in their valuations, suggesting SFL is an easy business to forecast or the the analysts are all using similar assumptions.
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. We can infer from the latest estimates that forecasts expect a continuation of SFL'shistorical trends, as the 14% annualised revenue growth to the end of 2024 is roughly in line with the 12% 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 1.3% per year. So although SFL is expected to maintain its revenue growth rate, it's definitely expected to grow faster than the wider industry.
The Bottom Line
The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around SFL's earnings potential next year. Pleasantly, they also upgraded their revenue estimates, and their forecasts suggest the business is expected to grow faster than the wider industry. We note an upgrade to the price target, suggesting that the analysts believes the intrinsic value of the business is likely to improve over time.
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. We have estimates - from multiple SFL analysts - going out to 2026, and you can see them free on our platform here.
You still need to take note of risks, for example - SFL has 3 warning signs (and 2 which shouldn't be ignored) we think you should know about.
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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.
