Yahoo Finance Analysts Are Updating Their Exchange Income Corporation (TSE:EIF) Estimates After Its Yearly Results
Investors in Exchange Income Corporation (TSE:EIF) had a good week, as its shares rose 6.0% to close at CA$49.04 following the release of its annual results. The result was positive overall - although revenues of CA$2.5b were in line with what the analysts predicted, Exchange Income surprised by delivering a statutory profit of CA$2.65 per share, modestly greater than expected. 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. 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 Exchange Income
Taking into account the latest results, the consensus forecast from Exchange Income's nine analysts is for revenues of CA$2.76b in 2024. This reflects a decent 11% improvement in revenue compared to the last 12 months. Per-share earnings are expected to increase 2.2% to CA$2.65. Before this earnings report, the analysts had been forecasting revenues of CA$2.77b and earnings per share (EPS) of CA$2.78 in 2024. 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 minor downgrade to their earnings per share forecasts.
It might be a surprise to learn that the consensus price target was broadly unchanged at CA$63.25, 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 Exchange Income analyst has a price target of CA$70.00 per share, while the most pessimistic values it at CA$60.00. 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.
Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. We would highlight that Exchange Income's revenue growth is expected to slow, with the forecast 11% annualised growth rate until the end of 2024 being well below the historical 16% p.a. growth over the last five years. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 7.3% per year. Even after the forecast slowdown in growth, it seems obvious that Exchange Income is also expected to grow faster than the wider industry.
The Bottom Line
The most important thing to take away is that the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. 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$63.25, with the latest estimates not enough to have an impact on their price targets.
With that in mind, we wouldn't be too quick to come to a conclusion on Exchange Income. Long-term earnings power is much more important than next year's profits. We have forecasts for Exchange Income going out to 2026, and you can see them free on our platform here.
You should always think about risks though. Case in point, we've spotted 3 warning signs for Exchange Income you should be aware of, and 2 of them can't be ignored.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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.
