Employers Holdings, Inc. Beat Analyst Estimates: See What The Consensus Is Forecasting For Next Year
Investors in Employers Holdings, Inc. (NYSE:EIG) had a good week, as its shares rose 4.6% to close at US$32.54 following the release of its quarterly results. Revenues of US$163m fell slightly short of expectations, but earnings were a definite bright spot, with statutory per-share profits of US$1.05 an impressive 106% 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. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.
Check out our latest analysis for Employers Holdings
Following the recent earnings report, the consensus from dual analysts covering Employers Holdings is for revenues of US$649.7m in 2021, implying a considerable 11% decline in sales compared to the last 12 months. Statutory earnings per share are forecast to plunge 21% to US$2.25 in the same period. In the lead-up to this report, the analysts had been modelling revenues of US$679.1m and earnings per share (EPS) of US$1.94 in 2021. While revenue forecasts have been revised downwards, the analysts look to have become more optimistic on the company's cost base, given the solid gain to to the earnings per share numbers.
The consensus has made no major changes to the price target of US$50.00, suggesting the forecast improvement in earnings is expected to offset the decline in revenues next year.
Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. We would highlight that sales are expected to reverse, with the forecast 11% revenue decline a notable change from historical growth of 0.5% over the last five years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 4.8% annually for the foreseeable future. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Employers Holdings is expected to lag the wider industry.
The Bottom Line
The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around Employers Holdings' earnings potential next year. On the negative side, they also downgraded their revenue estimates, and forecasts imply revenues will perform worse than the wider industry. Even so, earnings are more important to the intrinsic value of the business. 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 said, the long-term trajectory of the company's earnings is a lot more important than next year. We have analyst estimates for Employers Holdings going out as far as 2021, and you can see them free on our platform here.
You still need to take note of risks, for example - Employers Holdings has 2 warning signs (and 1 which is concerning) we think you should know about.
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. 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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