Stella-Jones Inc. (TSE:SJ) Just Released Its Annual Results And Analysts Are Updating Their Estimates

Last week saw the newest yearly earnings release from Stella-Jones Inc. (TSE:SJ), an important milestone in the company's journey to build a stronger business. Stella-Jones reported CA$3.5b in revenue, roughly in line with analyst forecasts, although statutory earnings per share (EPS) of CA$5.66 beat expectations, being 4.4% higher than what the analysts expected. 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. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.

View our latest analysis for Stella-Jones

Taking into account the latest results, the current consensus from Stella-Jones' eight analysts is for revenues of CA$3.66b in 2025. This would reflect a reasonable 5.5% increase on its revenue over the past 12 months. Statutory per-share earnings are expected to be CA$5.62, roughly flat on the last 12 months. Before this earnings report, the analysts had been forecasting revenues of CA$3.62b and earnings per share (EPS) of CA$5.79 in 2025. The analysts seem to have become a little more negative on the business after the latest results, given the minor downgrade to their earnings per share numbers for next year.

The consensus price target held steady at CA$85.63, with the analysts seemingly voting that their lower forecast earnings are not expected to lead to a lower stock price in the foreseeable future. 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 Stella-Jones at CA$98.00 per share, while the most bearish prices it at CA$70.00. Analysts definitely have varying views on the business, but the spread of estimates is not wide enough in our view to suggest that extreme outcomes could await Stella-Jones shareholders.

Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. We would highlight that Stella-Jones' revenue growth is expected to slow, with the forecast 5.5% annualised growth rate until the end of 2025 being well below the historical 8.9% p.a. growth over the last five years. Compare this to the 12 other companies in this industry with analyst coverage, which are forecast to grow their revenue at 5.2% per year. So it's pretty clear that, while Stella-Jones' revenue growth is expected to slow, it's expected to grow roughly in line with the industry.

The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Stella-Jones. They also reconfirmed their revenue estimates, with the company predicted to grow at about the same rate as 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.

With that in mind, we wouldn't be too quick to come to a conclusion on Stella-Jones. Long-term earnings power is much more important than next year's profits. We have forecasts for Stella-Jones going out to 2026, and you can see them free on our platform here.

Plus, you should also learn about the 1 warning sign we've spotted with Stella-Jones .

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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.