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Manulife Financial Corporation Beat Analyst Estimates: See What The Consensus Is Forecasting For This Year

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Simply Wall St
·4 min read
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Manulife Financial Corporation (TSE:MFC) just released its full-year report and things are looking bullish. It was overall a positive result, with revenues beating expectations by 4.9% to hit CA$77b. Manulife Financial reported statutory earnings per share (EPS) CA$2.93, which was a notable 10% above what the analysts had forecast. 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.

View our latest analysis for Manulife Financial

earnings-and-revenue-growth
earnings-and-revenue-growth

After the latest results, the consensus from Manulife Financial's ten analysts is for revenues of CA$63.6b in 2021, which would reflect a definite 17% decline in sales compared to the last year of performance. Statutory earnings per share are expected to reduce 6.6% to CA$2.74 in the same period. Yet prior to the latest earnings, the analysts had been anticipated revenues of CA$63.6b and earnings per share (EPS) of CA$2.88 in 2021. So it looks like there's been a small decline in overall sentiment after the recent results - there's been no major change to revenue estimates, but the analysts did make a minor downgrade to their earnings per share forecasts.

The consensus price target held steady at CA$26.63, with the analysts seemingly voting that their lower forecast earnings are not expected to lead to a lower stock price in the foreseeable future. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. Currently, the most bullish analyst values Manulife Financial at CA$32.00 per share, while the most bearish prices it at CA$23.00. These price targets show that analysts do have some differing views on the business, but the estimates do not vary enough to suggest to us that some are betting on wild success or utter failure.

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. These estimates imply that sales are expected to slow, with a forecast revenue decline of 17%, a significant reduction from annual growth of 12% over the last five years. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 3.2% next year. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Manulife Financial is expected to lag the wider industry.

The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Manulife Financial. 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.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. At Simply Wall St, we have a full range of analyst estimates for Manulife Financial going out to 2024, and you can see them free on our platform here..

We don't want to rain on the parade too much, but we did also find 2 warning signs for Manulife Financial that you need to be mindful 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.