Yahoo Finance Earnings Miss: Selective Insurance Group, Inc. Missed EPS By 29% And Analysts Are Revising Their Forecasts
Last week, you might have seen that Selective Insurance Group, Inc. (NASDAQ:SIGI) released its quarterly result to the market. The early response was not positive, with shares down 3.7% to US$96.41 in the past week. It looks like a pretty bad result, all things considered. Although revenues of US$1.2b were in line with analyst predictions, statutory earnings fell badly short, missing estimates by 29% to hit US$1.31 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. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.
View our latest analysis for Selective Insurance Group
Following the latest results, Selective Insurance Group's seven analysts are now forecasting revenues of US$4.88b in 2024. This would be a meaningful 11% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to surge 20% to US$6.86. Before this earnings report, the analysts had been forecasting revenues of US$4.86b and earnings per share (EPS) of US$7.66 in 2024. So there's definitely been a decline in sentiment after the latest results, noting the substantial drop in new EPS forecasts.
It might be a surprise to learn that the consensus price target was broadly unchanged at US$107, with the analysts clearly implying that the forecast decline in earnings is not expected to have much of an impact on valuation. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. Currently, the most bullish analyst values Selective Insurance Group at US$120 per share, while the most bearish prices it at US$98.00. Still, with such a tight range of estimates, it suggeststhe analysts have a pretty good idea of what they think the company is worth.
Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. The analysts are definitely expecting Selective Insurance Group's growth to accelerate, with the forecast 15% annualised growth to the end of 2024 ranking favourably alongside historical growth of 9.9% per annum over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 6.0% annually. Factoring in the forecast acceleration in revenue, it's pretty clear that Selective Insurance Group is expected to grow much faster than its 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. 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.
With that in mind, we wouldn't be too quick to come to a conclusion on Selective Insurance Group. Long-term earnings power is much more important than next year's profits. At Simply Wall St, we have a full range of analyst estimates for Selective Insurance Group going out to 2025, and you can see them free on our platform here..
It is also worth noting that we have found 1 warning sign for Selective Insurance Group that you need to take into consideration.
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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.
