Power Corporation of Canada (TSE:POW) Just Released Its Yearly Earnings: Here's What Analysts Think

As you might know, Power Corporation of Canada (TSE:POW) recently reported its yearly numbers. It was a pretty mixed result, with revenues beating expectations to hit CA$70b. Statutory earnings fell 3.5% short of analyst forecasts, reaching CA$4.27 per share. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.

Check out our latest analysis for Power Corporation of Canada

Following last week's earnings report, Power Corporation of Canada's five analysts are forecasting 2022 revenues to be CA$70.2b, approximately in line with the last 12 months. Statutory earnings per share are forecast to decrease 9.8% to CA$3.90 in the same period. Before this earnings report, the analysts had been forecasting revenues of CA$70.7b and earnings per share (EPS) of CA$3.96 in 2022. The consensus analysts don't seem to have seen anything in these results that would have changed their view on the business, given there's been no major change to their estimates.

There were no changes to revenue or earnings estimates or the price target of CA$46.78, suggesting that the company has met expectations in its recent result. 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 Power Corporation of Canada at CA$50.00 per share, while the most bearish prices it at CA$44.00. The narrow spread of estimates could suggest that the business' future is relatively easy to value, or thatthe analysts have a strong view on its prospects.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Power Corporation of Canada's past performance and to peers in the same industry. We would highlight that Power Corporation of Canada's revenue growth is expected to slow, with the forecast 0.8% annualised growth rate until the end of 2022 being well below the historical 7.1% p.a. growth over the last five years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 12% annually. So it's pretty clear that, while revenue growth is expected to slow down, the wider industry is also expected to grow faster than Power Corporation of Canada.

The Bottom Line

The most obvious conclusion is that there's been no major change in the business' prospects in recent times, with the analysts holding their earnings forecasts steady, in line with previous estimates. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting sales are tracking in line with expectations - although our data does suggest that Power Corporation of Canada's revenues are expected to perform worse than the wider industry. The consensus price target held steady at CA$46.78, with the latest estimates not enough to have an impact on their price targets.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have forecasts for Power Corporation of Canada going out to 2023, and you can see them free on our platform here.

However, before you get too enthused, we've discovered 1 warning sign for Power Corporation of Canada that you should be aware of.

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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.