IDACORP, Inc. (NYSE:IDA) just released its latest third-quarter results and things are looking bullish. It was a positive result, with revenues and statutory earnings per share (EPS) both performing well. Revenues were 12% higher than the analysts had forecast, at US$425m, while EPS of US$2.02 beat analyst models by 4.8%. 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. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.
Following last week's earnings report, IDACORP's three analysts are forecasting 2021 revenues to be US$1.33b, approximately in line with the last 12 months. Statutory earnings per share are expected to dip 2.3% to US$4.78 in the same period. Before this earnings report, the analysts had been forecasting revenues of US$1.33b and earnings per share (EPS) of US$4.71 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.
The analysts reconfirmed their price target of US$103, showing that the business is executing well and in line with expectations. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. The most optimistic IDACORP analyst has a price target of US$110 per share, while the most pessimistic values it at US$95.00. Still, with such a tight range of estimates, it suggeststhe analysts have a pretty good idea of what they think the company is worth.
These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the IDACORP's past performance and to peers in the same industry. It's pretty clear that there is an expectation that IDACORP's revenue growth will slow down substantially, with revenues next year expected to grow 0.04%, compared to a historical growth rate of 1.4% over the past five years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 3.9% next year. Factoring in the forecast slowdown in growth, it seems obvious that IDACORP is also expected to grow slower than other industry participants.
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. On the plus side, there were no major changes to revenue estimates; although forecasts imply revenues will perform worse than the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.
With that in mind, we wouldn't be too quick to come to a conclusion on IDACORP. Long-term earnings power is much more important than next year's profits. We have forecasts for IDACORP going out to 2022, and you can see them free on our platform here.
However, before you get too enthused, we've discovered 2 warning signs for IDACORP (1 is a bit concerning!) 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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