Earnings Miss: Cogeco Communications Inc. Missed EPS By 8.7% And Analysts Are Revising Their Forecasts

Shareholders might have noticed that Cogeco Communications Inc. (TSE:CCA) filed its third-quarter result this time last week. The early response was not positive, with shares down 8.5% to CA$66.44 in the past week. It looks like the results were a bit of a negative overall. While revenues of CA$731m were in line with analyst predictions, statutory earnings were less than expected, missing estimates by 8.7% to hit CA$1.64 per share. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

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After the latest results, the consensus from Cogeco Communications' ten analysts is for revenues of CA$2.86b in 2026, which would reflect a perceptible 3.1% decline in revenue compared to the last year of performance. Statutory per share are forecast to be CA$7.82, approximately in line with the last 12 months. Yet prior to the latest earnings, the analysts had been anticipated revenues of CA$2.92b and earnings per share (EPS) of CA$8.05 in 2026. The analysts are less bullish than they were before these results, given the reduced revenue forecasts and the small dip in earnings per share expectations.

See our latest analysis for Cogeco Communications

Despite the cuts to forecast earnings, there was no real change to the CA$77.64 price target, showing that the analysts don't think the changes have a meaningful impact on its intrinsic value. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. The most optimistic Cogeco Communications analyst has a price target of CA$98.00 per share, while the most pessimistic values it at CA$64.00. This shows there is still a bit of diversity in estimates, but analysts don't appear to be totally split on the stock as though it might be a success or failure situation.

Of course, another way to look at these forecasts is to place them into context against the industry itself. We would highlight that revenue is expected to reverse, with a forecast 2.5% annualised decline to the end of 2026. That is a notable change from historical growth of 5.1% over the last five years. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 2.0% per year. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Cogeco Communications is expected to lag the wider industry.

The Bottom Line

The most important thing to take away is that the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. Unfortunately, they also downgraded their revenue estimates, and our data indicates underperformance compared to the wider industry. Even so, earnings per share are more important to the intrinsic value of the business. The consensus price target held steady at CA$77.64, with the latest estimates not enough to have an impact on their price targets.

Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. We have forecasts for Cogeco Communications going out to 2027, and you can see them free on our platform here.

Don't forget that there may still be risks. For instance, we've identified 1 warning sign for Cogeco Communications 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.