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Results: Emera Incorporated Beat Earnings Expectations And Analysts Now Have New Forecasts

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Simply Wall St
·4 min read
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Emera Incorporated (TSE:EMA) came out with its yearly results last week, and we wanted to see how the business is performing and what industry forecasters think of the company following this report. Revenues of CA$5.5b fell slightly short of expectations, but earnings were a definite bright spot, with statutory per-share profits of CA$3.78 an impressive 30% ahead of estimates. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.

View our latest analysis for Emera

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

After the latest results, the 13 analysts covering Emera are now predicting revenues of CA$6.33b in 2021. If met, this would reflect a decent 15% improvement in sales compared to the last 12 months. Statutory earnings per share are forecast to dive 25% to CA$2.85 in the same period. In the lead-up to this report, the analysts had been modelling revenues of CA$6.26b and earnings per share (EPS) of CA$2.96 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 small dip in their earnings per share forecasts.

It might be a surprise to learn that the consensus price target was broadly unchanged at CA$58.79, with the analysts clearly implying that the forecast decline in earnings is not expected to have much of an impact on valuation. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. The most optimistic Emera analyst has a price target of CA$64.00 per share, while the most pessimistic values it at CA$46.50. The narrow spread of estimates could suggest that the business' future is relatively easy to value, or thatthe analysts have a strong view on its prospects.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Emera's past performance and to peers in the same industry. The analysts are definitely expecting Emera's growth to accelerate, with the forecast 15% growth ranking favourably alongside historical growth of 11% per annum over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 4.8% next year. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect Emera to grow faster than 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 Emera. Happily, there were no major changes to revenue forecasts, with the business still expected to grow faster than the wider industry. The consensus price target held steady at CA$58.79, 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. We have estimates - from multiple Emera analysts - going out to 2023, and you can see them free on our platform here.

Even so, be aware that Emera is showing 4 warning signs in our investment analysis , and 2 of those are a bit concerning...

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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