Last week saw the newest quarterly earnings release from PFB Corporation (TSE:PFB), an important milestone in the company's journey to build a stronger business. Revenues of CA$24m missed analyst estimates by a little bit, but statutory earnings beat expectations by an impressive , coming in at CA$0.05 per share. 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. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.
Taking into account the latest results, the two analysts covering PFB provided consensus estimates of CA$129.2m revenue in 2020, which would reflect a perceptible 3.1% decline on its sales over the past 12 months. Statutory earnings per share are forecast to dip 3.2% to CA$1.52 in the same period. In the lead-up to this report, the analysts had been modelling revenues of CA$138.2m and earnings per share (EPS) of CA$1.29 in 2020. Although the analysts have lowered their sales forecasts, they've also made a nice increase in their earnings per share estimates, which implies there's been something of an uptick in sentiment following the latest results.
There's been no real change to the average price target of CA$15.00, with the lower revenue and higher earnings forecasts not expected to meaningfully impact the company's valuation over a longer timeframe.
Of course, another way to look at these forecasts is to place them into context against the industry itself. We would highlight that sales are expected to reverse, with the forecast 3.1% revenue decline a notable change from historical growth of 7.8% over the last five years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 3.7% annually for the foreseeable future. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - PFB is expected to lag the wider industry.
The Bottom Line
The most important thing here is that the analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards PFB following these results. On the negative side, they also downgraded their revenue estimates, and forecasts imply revenues will perform worse than the wider industry. Even so, earnings per share are more important to the intrinsic value of the business. The consensus price target held steady at CA$15.00, with the latest estimates not enough to have an impact on their price targets.
Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. At least one analyst has provided forecasts out to 2021, which can be seen for free on our platform here.
Plus, you should also learn about the 2 warning signs we've spotted with PFB .
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