Yahoo Finance Results: Stella-Jones Inc. Exceeded Expectations And The Consensus Has Updated Its Estimates
It's been a good week for Stella-Jones Inc. (TSE:SJ) shareholders, because the company has just released its latest quarterly results, and the shares gained 9.7% to CA$79.50. Revenues were CA$775m, approximately in line with whatthe analysts expected, although statutory earnings per share (EPS) crushed expectations, coming in at CA$1.36, an impressive 26% ahead of estimates. 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. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.
Check out our latest analysis for Stella-Jones
Following the latest results, Stella-Jones' seven analysts are now forecasting revenues of CA$3.60b in 2024. This would be a credible 6.3% improvement in revenue compared to the last 12 months. Statutory earnings per share are expected to reduce 4.5% to CA$5.78 in the same period. Yet prior to the latest earnings, the analysts had been anticipated revenues of CA$3.59b and earnings per share (EPS) of CA$5.65 in 2024. So the consensus seems to have become somewhat more optimistic on Stella-Jones' earnings potential following these results.
There's been no major changes to the consensus price target of CA$93.14, suggesting that the improved earnings per share outlook is not enough to have a long-term positive impact on the stock's 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 Stella-Jones at CA$98.00 per share, while the most bearish prices it at CA$86.00. Even so, with a relatively close grouping of estimates, it looks like the analysts are quite confident in their valuations, suggesting Stella-Jones is an easy business to forecast or the the analysts are all using similar assumptions.
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. The period to the end of 2024 brings more of the same, according to the analysts, with revenue forecast to display 8.5% growth on an annualised basis. That is in line with its 9.5% annual growth 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 revenues grow 5.5% per year. So although Stella-Jones is expected to maintain its revenue growth rate, it's definitely expected to grow faster than the wider industry.
The Bottom Line
The most important thing here is that the analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards Stella-Jones 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$93.14, 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 Stella-Jones. Long-term earnings power is much more important than next year's profits. We have forecasts for Stella-Jones going out to 2026, and you can see them free on our platform here.
We don't want to rain on the parade too much, but we did also find 1 warning sign for Stella-Jones that you need to be mindful of.
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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.
