Canaccord Genuity Group Inc. (TSE:CF) Analysts Just Slashed This Year's Estimates

The analysts covering Canaccord Genuity Group Inc. (TSE:CF) delivered a dose of negativity to shareholders today, by making a substantial revision to their statutory forecasts for this year. Both revenue and earnings per share (EPS) estimates were cut sharply as the analysts factored in the latest outlook for the business, concluding that they were too optimistic previously.

After the downgrade, the consensus from Canaccord Genuity Group's three analysts is for revenues of CA$1.6b in 2023, which would reflect an uneasy 13% decline in sales compared to the last year of performance. Statutory earnings per share are anticipated to plummet 65% to CA$0.61 in the same period. Prior to this update, the analysts had been forecasting revenues of CA$1.8b and earnings per share (EPS) of CA$1.59 in 2023. Indeed, we can see that the analysts are a lot more bearish about Canaccord Genuity Group's prospects, administering a measurable cut to revenue estimates and slashing their EPS estimates to boot.

See our latest analysis for Canaccord Genuity Group

It'll come as no surprise then, to learn that the analysts have cut their price target 7.1% to CA$13.13. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. There are some variant perceptions on Canaccord Genuity Group, with the most bullish analyst valuing it at CA$16.50 and the most bearish at CA$10.50 per share. These price targets show that analysts do have some differing views on the business, but the estimates do not vary enough to suggest to us that some are betting on wild success or utter failure.

One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. These estimates imply that sales are expected to slow, with a forecast annualised revenue decline of 17% by the end of 2023. This indicates a significant reduction from annual growth of 19% over the last five years. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 3.6% per year. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Canaccord Genuity Group is expected to lag the wider industry.

The Bottom Line

The biggest issue in the new estimates is that analysts have reduced their earnings per share estimates, suggesting business headwinds lay ahead for Canaccord Genuity Group. Regrettably, they also downgraded their revenue estimates, and the latest forecasts imply the business will grow sales slower than the wider market. Given the scope of the downgrades, it would not be a surprise to see the market become more wary of the business.

Even so, the longer term trajectory of the business is much more important for the value creation of shareholders. At Simply Wall St, we have a full range of analyst estimates for Canaccord Genuity Group going out to 2024, and you can see them free on our platform here.

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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.