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It's been a pretty great week for Sinclair Broadcast Group, Inc. (NASDAQ:SBGI) shareholders, with its shares surging 14% to US$35.66 in the week since its latest full-year results. It was a pretty bad result overall; while revenues were in line with expectations at US$5.9b, statutory losses exploded to US$30.20 per share. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Sinclair Broadcast Group after the latest results.
Taking into account the latest results, the consensus forecast from Sinclair Broadcast Group's six analysts is for revenues of US$6.23b in 2021, which would reflect an okay 4.8% improvement in sales compared to the last 12 months. Losses are predicted to fall substantially, shrinking 83% to US$5.27. Yet prior to the latest earnings, the analysts had been forecasting revenues of US$6.30b and losses of US$0.38 per share in 2021. While this year's revenue estimates held steady, there was also a considerable increase to loss per share expectations, suggesting the consensus has a bit of a mixed view on the stock.
Although the analysts are now forecasting higher losses, the average price target rose 8.3% to US$28.63, which could indicate that these losses are expected to be "one-off", or are not anticipated to have a longer-term impact on the business. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. The most optimistic Sinclair Broadcast Group analyst has a price target of US$40.00 per share, while the most pessimistic values it at US$17.00. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the business.
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 Sinclair Broadcast Group's revenue growth will slow down substantially, with revenues to the end of 2021 expected to display 4.8% growth on an annualised basis. This is compared to a historical growth rate of 20% over the past five years. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 4.5% annually. So it's pretty clear that, while Sinclair Broadcast Group's revenue growth is expected to slow, it's expected to grow roughly in line with the industry.
The Bottom Line
The most important thing to take away is that the analysts increased their loss per share estimates for next year. They also reconfirmed their revenue estimates, with the company predicted to grow at about the same rate as 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.
With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have estimates - from multiple Sinclair Broadcast Group analysts - going out to 2024, and you can see them free on our platform here.
You still need to take note of risks, for example - Sinclair Broadcast Group has 4 warning signs (and 2 which can't be ignored) we think you should know about.
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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