The North West Company Inc. Third-Quarter Results Just Came Out: Here's What Analysts Are Forecasting For Next Year
Last week, you might have seen that The North West Company Inc. (TSE:NWC) released its third-quarter result to the market. The early response was not positive, with shares down 2.6% to CA$27.69 in the past week. It was an okay report, and revenues came in at CA$520m, approximately in line with analyst estimates leading up to the results announcement. This is an important time for investors, as they can track a company's performance in its report, look at what top analysts are forecasting for next year, and see if there has been any change to expectations for the business. Readers will be glad to know we've aggregated the latest forecasts to see whether analysts have changed their mind on North West after the latest results.
See our latest analysis for North West
Taking into account the latest results, the most recent consensus for North West from five analysts is for revenues of CA$2.16b in 2021, which is a reasonable 4.4% increase on its sales over the past 12 months. Yet prior to the latest earnings, analysts had been forecasting revenues of CA$2.18b and earnings per share (EPS) of CA$2.20 in 2021. So we can see that while the consensus made no real change to its revenue estimates, it also no longer provides an earnings per share estimate, suggesting that revenues are what the market is focusing on after the latest results.
There's been no real change to the consensus price target of CA$30.80, with North Westseemingly executing in line with expectations. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. There are some variant perceptions on North West, with the most bullish analyst valuing it at CA$34.00 and the most bearish at CA$30.00 per share. The narrow spread of estimates could suggest that the business' future is relatively easy to value, or that analysts have a clear view on its prospects.
Zooming out to look at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up both against past performance, and against industry growth estimates. We can infer from the latest estimates that analysts are expecting a continuation of North West's historical trends, as next year's forecast 4.4% revenue growth is roughly in line with 4.8% annual revenue 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 3.0% per year. So although North West is expected to maintain its revenue growth rate, it's definitely expected to grow faster than the wider market.
The Bottom Line
The biggest concern with the new estimates is that analysts have reduced their earnings per share estimates, suggesting business headwinds could lay ahead for North West. Fortunately, analysts also reconfirmed their revenue estimates, suggesting sales are tracking in line with expectations - and our data does suggest that North West's revenues are expected to grow faster than the wider market. 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.
At least one of North West's five analysts has provided estimates out to 2022, which can be seen for free on our platform here.
It might also be worth considering whether North West's debt load is appropriate, using our debt analysis tools on the Simply Wall St platform, here.
If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. 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. Simply Wall St has no position in the stocks mentioned.
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