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Rainbows and Unicorns: Old Republic International Corporation (NYSE:ORI) Analysts Just Became A Lot More Optimistic

·2 min read

Celebrations may be in order for Old Republic International Corporation ( NYSE:ORI ) shareholders, with the analysts delivering a significant upgrade to their statutory estimates for the company. Consensus estimates suggest investors could expect greatly increased statutory revenues and earnings per share, with analysts modelling a real improvement in business performance.

After the upgrade, the consensus from Old Republic International's two analysts is for revenues of US$8.4b in 2021, which would reflect a noticeable 6.0% decline in sales compared to the last 12 months performance. Statutory earnings per share are anticipated to tumble 26% to US$3.92 in the same period. Previously, the analysts had been modelling revenues of US$7.6b and earnings per share (EPS) of US$3.34 in 2021. So we can see there's been a pretty clear increase in analyst sentiment in recent times, with both revenues and earnings per share receiving a decent lift in the latest estimates.

See our latest analysis for Old Republic International

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

One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. These estimates imply that sales are expected to slow, with a forecast annualised revenue decline of 12% by the end of 2021. This indicates a significant reduction from annual growth of 6.7% 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 3.6% annually for the foreseeable future. It's pretty clear that Old Republic International's revenues are expected to perform substantially worse than the wider industry.

The Bottom Line

The most important thing to take away from this upgrade is that analysts upgraded their earnings per share estimates for this year, expecting improving business conditions. Pleasantly, analysts also upgraded their revenue estimates, and their forecasts suggest the business is expected to grow slower than the wider market. More bullish expectations could be a signal for investors to take a closer look at Old Republic International.

Even so, the longer term trajectory of the business is much more important for the value creation of shareholders. At least one analyst has provided forecasts out to 2023, which can be seen for free on our platform here.

Of course, seeing company management invest large sums of money in a stock can be just as useful as knowing whether analysts are upgrading their estimates. So you may also wish to search this free list of stocks that insiders are buying .

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.