As you might know, Horace Mann Educators Corporation (NYSE:HMN) recently reported its quarterly numbers. Earnings per share of US$0.60 unfortunately missed expectations by 14%, although it was encouraging to see revenues of US$334m exceed expectations by 9.7%. Analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. So we collected the latest post-earnings consensus estimates to see what could be in store for next year.
Following last week’s earnings report, Horace Mann Educators’s sole analyst are forecasting 2020 revenues to be US$1.4b, approximately in line with the last 12 months. Earnings per share are expected to decline 11% to US$2.80 in the same period. Yet prior to the latest earnings, analysts had been forecasting revenues of US$1.2b and earnings per share (EPS) of US$2.63 in 2020. Analysts seem more optimistic after the latest results, with a solid increase in revenue and a small increase to earnings per share estimates.
It will come as no surprise to learn that analysts have increased their price target for Horace Mann Educators 6.5% to US$49.00 on the back of these upgrades.
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 analysts are more or less bullish relative to other companies in the market. We would highlight that Horace Mann Educators’s revenue growth is expected to slow, with forecast 0.5% increase next year well below the historical 4.5%p.a. growth over the last five years. By way of comparison, the 131 other companies in this market with analyst coverage, are forecast to grow their revenue at 3.2% per year. Factoring in the forecast slowdown in growth, it seems obvious that analysts are also expecting Horace Mann Educators to grow slower than the wider market.
The Bottom Line
The most important thing to take away from this is that analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards Horace Mann Educators following these results. They also upgraded their revenue estimates for next year, even though sales are expected to grow slower than the wider market. Analysts also upgraded their price target, suggesting that analysts believe the intrinsic value of the business is likely to improve over time.
Even so, the longer term trajectory of the business is much more important for the value creation of shareholders. At least one analyst has provided forecasts out to 2021, which can be seen for free on our platform here.
You can also see whether Horace Mann Educators is carrying too much debt, and whether its balance sheet is healthy, for free on our platform here.
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