Canadian Utilities Limited Earnings Missed Analyst Estimates: Here's What Analysts Are Forecasting Now

Canadian Utilities Limited (TSE:CU) shareholders are probably feeling a little disappointed, since its shares fell 3.2% to CA$35.13 in the week after its latest full-year results. Revenues were in line with forecasts, at CA$4.0b, although statutory earnings per share came in 14% below what the analysts expected, at CA$2.06 per share. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Canadian Utilities after the latest results.

View our latest analysis for Canadian Utilities

Taking into account the latest results, Canadian Utilities' seven analysts currently expect revenues in 2023 to be CA$4.01b, approximately in line with the last 12 months. Before this earnings report, the analysts had been forecasting revenues of CA$4.07b and earnings per share (EPS) of CA$2.36 in 2023. Overall, while the analysts have reconfirmed their revenue estimates, the consensus now no longer provides an EPS estimate, suggesting that the market believes revenue is more important after these latest results.

We'd also point out that thatthe analysts have made no major changes to their price target of CA$38.39. 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 Canadian Utilities analyst has a price target of CA$43.00 per share, while the most pessimistic values it at CA$30.00. 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 Canadian Utilities shareholders.

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. One thing that stands out from these estimates is that shrinking revenues are expected to moderate over the period ending 2023 compared to the historical decline of 4.3% 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 see their revenue grow 0.7% per year. So while a broad number of companies are forecast to grow, unfortunately Canadian Utilities is expected to see its sales affected worse than other companies in the industry.

The Bottom Line

The most important thing to take away is that the analysts reconfirmed their revenue estimates for next year, suggesting that the business is performing in line with expectations. On the plus side, there were no major changes to revenue estimates; although forecasts imply revenues will perform worse than 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.

We have estimates for Canadian Utilities from its seven analysts out to 2025, and you can see them free on our platform here.

It is also worth noting that we have found 1 warning sign for Canadian Utilities that you need to take into consideration.

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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.