Analysts Are Betting On CI Financial Corp (TSE:CIX) With A Big Upgrade This Week

CI Financial Corp (TSE:CIX) 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 CI Financial will make substantially more sales than they'd previously expected. The market seems to be pricing in some improvement in the business too, with the stock up 6.0% over the past week, closing at CA$18.52. Whether the upgrade is enough to drive the stock price higher is yet to be seen, however.

Following the upgrade, the current consensus from CI Financial's five analysts is for revenues of CA$2.5b in 2021 which - if met - would reflect a substantial 22% increase on its sales over the past 12 months. Per-share earnings are expected to bounce 23% to CA$2.73. Prior to this update, the analysts had been forecasting revenues of CA$2.3b and earnings per share (EPS) of CA$2.59 in 2021. Sentiment certainly seems to have improved in recent times, with a nice increase in revenue and a modest lift to earnings per share estimates.

Check out our latest analysis for CI Financial

With these upgrades, we're not surprised to see that the analysts have lifted their price target 7.3% to CA$22.11 per share. 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 CI Financial at CA$25.00 per share, while the most bearish prices it at CA$20.00. With such a narrow range of valuations, analysts apparently share similar views on what they think the business 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 CI Financial's past performance and to peers in the same industry. The analysts are definitely expecting CI Financial's growth to accelerate, with the forecast 22% growth ranking favourably alongside historical growth of 1.6% per annum over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue shrink 6.5% per year. So it's clear with the acceleration in growth, CI Financial is expected to grow meaningfully faster than the wider industry.

The Bottom Line

The most important thing to take away from this upgrade is that analysts upgraded their earnings per share estimates for this year, expecting improving business conditions. On the plus side, they also lifted their revenue estimates, and the company is expected to perform better than the wider market. There was also a nice increase in the price target, with analysts apparently feeling that the intrinsic value of the business is improving. Given that analysts appear to be expecting substantial improvement in the sales pipeline, now could be the right time to take another look at CI Financial.

Even so, the longer term trajectory of the business is much more important for the value creation of shareholders. We have estimates - from multiple CI Financial analysts - going out to 2022, and you can see them free on our platform here.

Another thing to consider is whether management and directors have been buying or selling stock recently. We provide an overview of all open market stock trades for the last twelve months on our platform, here.

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