Industry Analysts Just Upgraded Their First National Financial Corporation (TSE:FN) Revenue Forecasts By 36%

First National Financial Corporation (TSE:FN) shareholders will have a reason to smile today, with the analysts making substantial upgrades to this year's forecasts. The analysts have sharply increased their revenue numbers, with a view that First National Financial will make substantially more sales than they'd previously expected. Investor sentiment seems to be improving too, with the share price up 4.1% to CA$40.29 over the past 7 days. It will be interesting to see if this latest upgrade is enough to kickstart further buying interest in the stock.

Following the upgrade, the current consensus from First National Financial's three analysts is for revenues of CA$1.1b in 2023 which - if met - would reflect a sizeable 62% increase on its sales over the past 12 months. Statutory earnings per share are supposed to dip 9.8% to CA$2.98 in the same period. Prior to this update, the analysts had been forecasting revenues of CA$833m and earnings per share (EPS) of CA$2.89 in 2023. The forecasts seem more optimistic now, with a great increase in revenue and a small lift in earnings per share estimates.

Check out our latest analysis for First National Financial

With these upgrades, we're not surprised to see that the analysts have lifted their price target 5.0% to CA$38.17 per share. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. There are some variant perceptions on First National Financial, with the most bullish analyst valuing it at CA$40.00 and the most bearish at CA$36.00 per share. With such a narrow range of valuations, analysts apparently share similar views on what they think the business is worth.

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. It's clear from the latest estimates that First National Financial's rate of growth is expected to accelerate meaningfully, with the forecast 62% annualised revenue growth to the end of 2023 noticeably faster than its historical growth of 11% p.a. over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 15% annually. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect First National Financial to grow faster than the wider industry.

The Bottom Line

The biggest takeaway for us from these new estimates is that analysts upgraded their earnings per share estimates, with improved earnings power expected for this year. Fortunately, analysts also upgraded their revenue estimates, and our data indicates sales are expected to perform better than the wider market. There was also an increase in the price target, suggesting that there is more optimism baked into the forecasts than there was previously. Given that analysts appear to be expecting substantial improvement in the sales pipeline, now could be the right time to take another look at First National Financial.

Still, the long-term prospects of the business are much more relevant than next year's earnings. We have estimates - from multiple First National Financial analysts - going out to 2025, and you can see them free on our platform here.

Another way to search for interesting companies that could be reaching an inflection point is to track whether management are buying or selling, with our free list of growing companies that insiders are buying.

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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.