CI Financial Corp. Just Missed EPS By 89%: Here's What Analysts Think Will Happen Next

It's shaping up to be a tough period for CI Financial Corp. (TSE:CIX), which a week ago released some disappointing third-quarter results that could have a notable impact on how the market views the stock. Results showed a clear earnings miss, with CA$633m revenue coming in 10.0% lower than what the analystsexpected. Statutory earnings per share (EPS) of CA$0.08 missed the mark badly, arriving some 89% below what was expected. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

View our latest analysis for CI Financial

Taking into account the latest results, the current consensus, from the six analysts covering CI Financial, is for revenues of CA$2.72b in 2023, which would reflect an uneasy 8.0% reduction in CI Financial's sales over the past 12 months. Per-share earnings are expected to increase 4.5% to CA$2.63. Before this earnings report, the analysts had been forecasting revenues of CA$2.59b and earnings per share (EPS) of CA$3.40 in 2023. While next year's revenue estimates increased, there was also a large cut to EPS expectations, suggesting the consensus has a bit of a mixed view of these results.

There's been no major changes to the price target of CA$18.11, suggesting that the impact of higher forecast sales and lower earnings won't result in a meaningful change to the business' valuation. 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. Currently, the most bullish analyst values CI Financial at CA$22.00 per share, while the most bearish prices it at CA$16.00. 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.

Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. We would highlight that sales are expected to reverse, with a forecast 6.5% annualised revenue decline to the end of 2023. That is a notable change from historical growth of 5.4% over the last five years. Yet aggregate analyst estimates for other companies in the industry suggest that industry revenues are forecast to decline 17% per year. So it's pretty clear that CI Financial's revenues are expected to shrink slower than the wider industry.

The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for CI Financial. Fortunately, they also upgraded their revenue estimates, and our data indicates sales are expected to perform better than the wider industry. 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.

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 estimates - from multiple CI Financial analysts - going out to 2024, and you can see them free on our platform here.

It is also worth noting that we have found 2 warning signs for CI Financial (1 is a bit concerning!) that you need to take into consideration.

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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.