Equitable Group Inc. (TSE:EQB) Released Earnings Last Week And Analysts Lifted Their Price Target To CA$137

Equitable Group Inc. (TSE:EQB) just released its latest annual results and things are looking bullish. Results were good overall, with revenues beating analyst predictions by 3.7% to hit CA$515m. Statutory earnings per share (EPS) came in at CA$12.95, some 3.1% above whatthe analysts had expected. The 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. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

See our latest analysis for Equitable Group

Taking into account the latest results, the most recent consensus for Equitable Group from seven analysts is for revenues of CA$547.9m in 2021 which, if met, would be an okay 6.5% increase on its sales over the past 12 months. Per-share earnings are expected to expand 10% to CA$14.36. Yet prior to the latest earnings, the analysts had been anticipated revenues of CA$547.6m and earnings per share (EPS) of CA$14.18 in 2021. So it's pretty clear that, although the analysts have updated their estimates, there's been no major change in expectations for the business following the latest results.

With the analysts reconfirming their revenue and earnings forecasts, it's surprising to see that the price target rose 12% to CA$137. It looks as though they previously had some doubts over whether the business would live up to their expectations. 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. The most optimistic Equitable Group analyst has a price target of CA$138 per share, while the most pessimistic values it at CA$104. Still, with such a tight range of estimates, it suggeststhe analysts have a pretty good idea of what they think the company is worth.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Equitable Group's past performance and to peers in the same industry. We would highlight that Equitable Group's revenue growth is expected to slow, with forecast 6.5% increase next year well below the historical 13%p.a. growth over the last five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 1.2% next year. Even after the forecast slowdown in growth, it seems obvious that Equitable Group is also expected to grow faster than the wider industry.

The Bottom Line

The most obvious conclusion is that there's been no major change in the business' prospects in recent times, with the analysts holding their earnings forecasts steady, in line with previous estimates. Fortunately, they also reconfirmed their revenue numbers, suggesting sales are tracking in line with expectations - and our data suggests that revenues are expected to grow faster than the wider industry. We note an upgrade to the price target, suggesting that the analysts believes the intrinsic value of the business is likely to improve over time.

Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. We have forecasts for Equitable Group going out to 2022, and you can see them free on our platform here.

However, before you get too enthused, we've discovered 2 warning signs for Equitable Group that you should be aware of.

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