These Analysts Think Sun Life Financial Inc.'s (TSE:SLF) Sales Are Under Threat

The analysts covering Sun Life Financial Inc. (TSE:SLF) delivered a dose of negativity to shareholders today, by making a substantial revision to their statutory forecasts for this year. Revenue estimates were cut sharply as the analysts signalled a weaker outlook - perhaps a sign that investors should temper their expectations as well.

Following the downgrade, the most recent consensus for Sun Life Financial from its ten analysts is for revenues of CA$29b in 2022 which, if met, would be a sizeable 20% increase on its sales over the past 12 months. Statutory earnings per share are supposed to drop 10% to CA$5.72 in the same period. Prior to this update, the analysts had been forecasting revenues of CA$40b and earnings per share (EPS) of CA$5.69 in 2022. Indeed we can see that the consensus opinion has undergone some fundamental changes following the recent consensus updates, with a sizeable cut to revenues and some minor tweaks to earnings numbers.

See our latest analysis for Sun Life Financial

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. The analysts are definitely expecting Sun Life Financial's growth to accelerate, with the forecast 44% annualised growth to the end of 2022 ranking favourably alongside historical growth of 6.0% per annum over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 17% per year. Factoring in the forecast acceleration in revenue, it's pretty clear that Sun Life Financial is expected to grow much faster than its industry.

The Bottom Line

The most important thing to take away is that there's been no major change in sentiment, with analysts reconfirming that earnings per share are expected to continue performing in line with their prior expectations. While analysts did downgrade their revenue estimates, these forecasts still imply revenues will perform better than the wider market. Overall, given the drastic downgrade to this year's forecasts, we'd be feeling a little more wary of Sun Life Financial going forwards.

Still, the long-term prospects of the business are much more relevant than next year's earnings. We have estimates - from multiple Sun Life Financial analysts - going out to 2024, and you can see them free on our platform here.

Another way to search for interesting companies that could be reaching an inflection point is to track whether management are buying or selling, with our free list of growing companies that insiders are buying.

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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.