Cascades Inc. (TSE:CAS) Released Earnings Last Week And Analysts Lifted Their Price Target To CA$12.42

It's been a good week for Cascades Inc. (TSE:CAS) shareholders, because the company has just released its latest third-quarter results, and the shares gained 2.5% to CA$11.00. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.

View our latest analysis for Cascades

After the latest results, the five analysts covering Cascades are now predicting revenues of CA$4.89b in 2025. If met, this would reflect an okay 5.6% improvement in revenue compared to the last 12 months. Cascades is also expected to turn profitable, with statutory earnings of CA$1.39 per share. Before this earnings report, the analysts had been forecasting revenues of CA$4.85b and earnings per share (EPS) of CA$1.66 in 2025. So there's definitely been a decline in sentiment after the latest results, noting the substantial drop in new EPS forecasts.

Despite cutting their earnings forecasts,the analysts have lifted their price target 7.2% to CA$12.42, suggesting that these impacts are not expected to weigh on the stock's value in the long term. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. There are some variant perceptions on Cascades, with the most bullish analyst valuing it at CA$14.00 and the most bearish at CA$11.50 per share. With such a narrow range of valuations, the analysts apparently share similar views on what they think the business is worth.

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. It's clear from the latest estimates that Cascades' rate of growth is expected to accelerate meaningfully, with the forecast 4.5% annualised revenue growth to the end of 2025 noticeably faster than its historical growth of 0.2% p.a. over the past five years. Other similar companies in the industry (with analyst coverage) are also forecast to grow their revenue at 4.2% per year. Factoring in the forecast acceleration in revenue, it's pretty clear that Cascades is expected to grow at about the same rate as 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 Cascades. They also reconfirmed their revenue estimates, with the company predicted to grow at about the same rate as the wider industry. We note an upgrade to the price target, suggesting that the analysts believes the intrinsic value of the business is likely to improve over time.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. At Simply Wall St, we have a full range of analyst estimates for Cascades going out to 2026, and you can see them free on our platform here..

That said, it's still necessary to consider the ever-present spectre of investment risk. We've identified 2 warning signs with Cascades (at least 1 which is potentially serious) , and understanding these should be part of your investment process.

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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.