The yearly results for Jamieson Wellness Inc. (TSE:JWEL) were released last week, making it a good time to revisit its performance. The result was positive overall – although revenues of CA$345m were in line with what analysts predicted, Jamieson Wellness surprised by delivering a statutory profit of CA$0.80 per share, modestly greater than expected. 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. So we gathered the latest post-earnings forecasts to see what analysts’ statutory forecasts suggest is in store for next year.
Taking into account the latest results, the most recent consensus for Jamieson Wellness from eight analysts is for revenues of CA$371.2m in 2020, which is a reasonable 7.6% increase on its sales over the past 12 months. Statutory per share are forecast to be CA$0.82, approximately in line with the last 12 months. Prior to the latest earnings, analysts were forecasting revenues of CA$369.6m in 2020, and did not provide an EPS estimate. So we can see that while the consensus made no real change to its revenue estimates, analysts began providing earnings per share estimates, suggesting a heightened focus on the business’ earnings after the latest results.
The consensus price target was unchanged at CA$29.53, implying that the improved earnings outlook is not expected to have a long term impact on value creation for shareholders. 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. Currently, the most bullish analyst values Jamieson Wellness at CA$31.00 per share, while the most bearish prices it at CA$27.50. The narrow spread of estimates could suggest that the business’ future is relatively easy to value, or that analysts have a clear view on its prospects.
It can be useful to take a broader overview by seeing how analyst forecasts compare, both to the Jamieson Wellness’s past performance and to peers in the same market. We would highlight that Jamieson Wellness’s revenue growth is expected to slow, with forecast 7.6% increase next year well below the historical 10%p.a. growth over the last five years. Compare this against other companies (with analyst forecasts) in the market, which are in aggregate expected to see revenue growth of 19% next year. Factoring in the forecast slowdown in growth, it seems obvious that analysts still expect Jamieson Wellness to grow slower than the wider market.
The Bottom Line
The biggest takeaway for us from these new estimates is the bullish forecast for profits next year. Fortunately, analysts also reconfirmed their revenue estimates, suggesting sales are tracking in line with expectations – although our data does suggest that Jamieson Wellness’s revenues are expected to perform worse than the wider market. The consensus price target held steady at CA$29.53, with the latest estimates not enough to have an impact on analysts’ estimated valuations.
Still, the long-term prospects of the business are much more relevant than next year’s earnings. We have estimates – from multiple Jamieson Wellness analysts – going out to 2022, and you can see them free on our platform here.
You can also view our analysis of Jamieson Wellness’s balance sheet, and whether we think Jamieson Wellness is carrying too much debt, for free on our platform here.
If you spot an error that warrants correction, please contact the editor at email@example.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned.
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