Yahoo Finance Earnings Miss: CNO Financial Group, Inc. Missed EPS And Analysts Are Revising Their Forecasts
As you might know, CNO Financial Group, Inc. (NYSE:CNO) recently reported its quarterly numbers. Revenues of US$1.0b beat expectations by 8.6%. Unfortunately statutory earnings per share (EPS) fell well short of the mark, turning in a loss of US$0.01 compared to previous analyst expectations of a profit. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on CNO Financial Group after the latest results.
See our latest analysis for CNO Financial Group
After the latest results, the consensus from CNO Financial Group's five analysts is for revenues of US$3.63b in 2023, which would reflect a noticeable 3.0% decline in sales compared to the last year of performance. Statutory earnings per share are predicted to step up 20% to US$2.22. Before this earnings report, the analysts had been forecasting revenues of US$3.71b and earnings per share (EPS) of US$2.65 in 2023. From this we can that sentiment has definitely become more bearish after the latest results, leading to lower revenue forecasts and a real cut to earnings per share estimates.
Despite the cuts to forecast earnings, there was no real change to the US$25.00 price target, showing that the analysts don't think the changes have a meaningful impact on its intrinsic value. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. The most optimistic CNO Financial Group analyst has a price target of US$30.00 per share, while the most pessimistic values it at US$22.00. Analysts definitely have varying views on the business, but the spread of estimates is not wide enough in our view to suggest that extreme outcomes could await CNO Financial Group shareholders.
One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. One more thing stood out to us about these estimates, and it's the idea that CNO Financial Group's decline is expected to accelerate, with revenues forecast to fall at an annualised rate of 4.0% to the end of 2023. This tops off a historical decline of 2.9% a year 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 5.7% per year. So while a broad number of companies are forecast to grow, unfortunately CNO Financial Group is expected to see its sales affected worse than other companies in the industry.
The Bottom Line
The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for CNO Financial Group. On the negative side, they also downgraded their revenue estimates, and forecasts imply revenues will perform worse than the wider industry. The consensus price target held steady at US$25.00, with the latest estimates not enough to have an impact on their price targets.
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 forecasts for CNO Financial Group going out to 2025, and you can see them free on our platform here.
Plus, you should also learn about the 2 warning signs we've spotted with CNO Financial Group (including 1 which doesn't sit too well with us) .
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
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.
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