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SP Plus Corporation Just Reported Yearly Earnings: Have Analysts Changed Their Mind On The Stock?

Simply Wall St

SP Plus Corporation (NASDAQ:SP) missed earnings with its latest yearly results, disappointing overly-optimistic analysts. SP Plus missed analyst estimates, with revenues of US$935m and statutory earnings per share (EPS) of US$2.20, missing by 2.4% and 2.4% respectively. Earnings are an important time for investors, as they can track a company's performance, look at what top analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. We thought readers would find it interesting to see analysts' latest (statutory) post-earnings forecasts for next year.

See our latest analysis for SP Plus

NasdaqGS:SP Past and Future Earnings, February 24th 2020

Taking into account the latest results, the most recent consensus for SP Plus from four analysts is for revenues of US$995.4m in 2020, which is a credible 6.5% increase on its sales over the past 12 months. Statutory earnings per share are expected to ascend 16% to US$2.56. Yet prior to the latest earnings, analysts had been forecasting revenues of US$991.2m and earnings per share (EPS) of US$2.51 in 2020. So it's pretty clear that, although analysts have updated their estimates, there's been no major change in expectations for the business following the latest results.

There were no changes to revenue or earnings estimates or the price target of US$51.67, suggesting that the company has met expectations in its recent result. 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 SP Plus analyst has a price target of US$52.00 per share, while the most pessimistic values it at US$51.00. The narrow spread of estimates could suggest that the business' future is relatively easy to value, or that analysts have a clear view on its prospects.

Another way to assess these estimates is by comparing them to past performance, and seeing whether analysts are more or less bullish relative to other companies in the market. One thing stands out from these estimates, which is that analysts are forecasting SP Plus to grow faster in the future than it has in the past, with revenues expected to grow 6.5%. If achieved, this would be a much better result than the 0.7% annual decline over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenue grow 5.2% per year. So it looks like SP Plus is expected to grow at about the same rate as the wider market.

The Bottom Line

The most important thing to take away is that there's been no major change in sentiment, with analysts reconfirming that earnings per share are expected to continue performing in line with their prior expectations. They also reconfirmed their revenue estimates, with the company predicted to grow at about the same rate as the wider market. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.

Even so, the longer term trajectory of the business is much more important for the value creation of shareholders. We have forecasts for SP Plus going out to 2021, and you can see them free on our platform here.

You can also see whether SP Plus is carrying too much debt, and whether its balance sheet is healthy, for free on our platform here.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. 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. Simply Wall St has no position in the stocks mentioned.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Thank you for reading.