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Results: PFB Corporation Beat Earnings Expectations And Analysts Now Have New Forecasts

Simply Wall St
·3 min read

PFB Corporation (TSE:PFB) just released its third-quarter report and things are looking bullish. It was a solid earnings report, with revenues and statutory earnings per share (EPS) both coming in strong. Revenues were 18% higher than the analysts had forecast, at CA$42m, while EPS were CA$1.08 beating analyst models by 108%. 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. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.

Check out our latest analysis for PFB

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Taking into account the latest results, the consensus forecast from PFB's twin analysts is for revenues of CA$139.3m in 2021, which would reflect a modest 3.5% improvement in sales compared to the last 12 months. Statutory earnings per share are expected to sink 19% to CA$1.82 in the same period. In the lead-up to this report, the analysts had been modelling revenues of CA$135.2m and earnings per share (EPS) of CA$1.59 in 2021. So it seems there's been a definite increase in optimism about PFB's future following the latest results, with a nice increase in the earnings per share forecasts in particular.

With these upgrades, we're not surprised to see that the analysts have lifted their price target 26% to CA$23.25per share.

Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. It's pretty clear that there is an expectation that PFB's revenue growth will slow down substantially, with revenues next year expected to grow 3.5%, compared to a historical growth rate of 7.6% over the past five years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 4.6% next year. So it's pretty clear that, while revenue growth is expected to slow down, the wider industry is also expected to grow faster than PFB.

The Bottom Line

The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around PFB's earnings potential next year. Fortunately, they also upgraded their revenue estimates, although our data indicates sales are expected to perform worse than the wider industry. We note an upgrade to the price target, suggesting that the analysts believes the intrinsic value of the business is likely to improve over time.

Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. We have analyst estimates for PFB going out as far as 2021, and you can see them free on our platform here.

That said, it's still necessary to consider the ever-present spectre of investment risk. We've identified 3 warning signs with PFB (at least 1 which doesn't sit too well with us) , and understanding these should be part of your investment process.

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@simplywallst.com.