As you might know, PotlatchDeltic Corporation (NASDAQ:PCH) recently reported its third-quarter numbers. It looks to have been a decent result overall – while revenue fell marginally short of analyst estimates at US$226m, earnings beat expectations by a notable 17%, coming in at US$0.30 per share. Following the result, analysts have updated their earnings model, and it would be good to know whether they think there’s been a strong change in the company’s prospects, or if it’s business as usual. With this in mind, we’ve gathered the latest forecasts to see what analysts are expecting for next year.
Taking into account the latest results, the latest consensus from PotlatchDeltic’s six analysts is for revenues of US$904m in 2020, which would reflect an okay 7.5% improvement in sales compared to the last 12 months. Earnings per share are expected to soar 50% to US$1.03. Yet prior to the latest earnings, analysts had been forecasting revenues of US$904m and earnings per share (EPS) of US$1.03 in 2020. The consensus analysts don’t seem to have seen anything in these results that would have changed their view on the business, given there’s been no major change to their estimates.
It will come as no surprise then, to learn that the consensus price target is largely unchanged at US$45.60. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. Currently, the most bullish analyst values PotlatchDeltic at US$50.00 per share, while the most bearish prices it at US$42.00. The narrow spread of estimates could suggest that the business’ future is relatively easy to value, or that analysts have a clear view on its prospects.
Zooming out to look at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up both against past performance, and against industry growth estimates. We would highlight that PotlatchDeltic’s revenue growth is expected to slow, with forecast 7.5% increase next year well below the historical 11%p.a. growth over the last five years. By way of comparison, the 186 other companies in this market with analyst coverage, are forecast to grow their revenue at 5.2% next year. Even after the forecast slowdown in growth, it seems obvious that analysts are also expecting PotlatchDeltic to grow faster than the wider market.
The Bottom Line
The most important thing to take away is that there’s been no major change in sentiment, with analysts reconfirming that earnings per share are expected to continue performing in line with their prior expectations. Happily, there were no major changes to revenue forecasts, with analysts still expecting the business to grow faster than the wider market. 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. At Simply Wall St, we have a full range of analyst estimates for PotlatchDeltic going out to 2021, and you can see them free on our platform here..
You can also view our analysis of PotlatchDeltic’s balance sheet, and whether we think PotlatchDeltic is carrying too much debt, for free on our platform here.
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