TFI International Inc. (TSE:TFII) shareholders will have a reason to smile today, with the analysts making substantial upgrades to this year's statutory forecasts. The revenue forecast for this year has experienced a facelift, with analysts now much more optimistic on its sales pipeline.
Following the upgrade, the current consensus from TFI International's 16 analysts is for revenues of US$6.3b in 2021 which - if met - would reflect a substantial 57% increase on its sales over the past 12 months. Statutory earnings per share are presumed to bounce 21% to US$3.81. Prior to this update, the analysts had been forecasting revenues of US$5.7b and earnings per share (EPS) of US$3.53 in 2021. The forecasts seem more optimistic now, with a nice gain to revenue and a modest lift to earnings per share estimates.
With these upgrades, we're not surprised to see that the analysts have lifted their price target 6.2% to US$90.06 per share. 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. The most optimistic TFI International analyst has a price target of US$125 per share, while the most pessimistic values it at US$55.63. This is a fairly broad spread of estimates, suggesting that the analysts are forecasting a wide range of possible outcomes for the business.
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. The analysts are definitely expecting TFI International's growth to accelerate, with the forecast 83% annualised growth to the end of 2021 ranking favourably alongside historical growth of 4.7% per annum over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 6.1% annually. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect TFI International to grow faster than the wider industry.
The Bottom Line
The biggest takeaway for us from these new estimates is that analysts upgraded their earnings per share estimates, with improved earnings power expected for this year. They also upgraded their revenue estimates for this year, and sales are expected to grow faster than the wider market. There was also an increase in the price target, suggesting that there is more optimism baked into the forecasts than there was previously. Seeing the dramatic upgrade to this year's forecasts, it might be time to take another look at TFI International.
Using these estimates as a starting point, we've run a discounted cash flow calculation (DCF) on TFI International that suggests the company could be somewhat undervalued. You can learn more about our valuation methodology on our platform here.
If you're looking for stocks to buy, use the lowest-cost* platform that is rated #1 Overall by Barron’s, Interactive Brokers. Trade stocks, options, futures, forex, bonds and funds on 135 markets, all from a single integrated account.
This article by Simply Wall St is general in nature. 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.
*Interactive Brokers Rated Lowest Cost Broker by StockBrokers.com Annual Online Review 2020
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.