What Does The Future Hold For Emera Incorporated (TSE:EMA)? These Analysts Have Been Cutting Their Estimates

One thing we could say about the analysts on Emera Incorporated (TSE:EMA) - they aren't optimistic, having just made a major negative revision to their near-term (statutory) forecasts for the organization. Revenue estimates were cut sharply as analysts signalled a weaker outlook - perhaps a sign that investors should temper their expectations as well.

Following the latest downgrade, the ten analysts covering Emera provided consensus estimates of CA$6.3b revenue in 2023, which would reflect a considerable 11% decline on its sales over the past 12 months. Prior to the latest estimates, the analysts were forecasting revenues of CA$7.2b in 2023. It looks like forecasts have become a fair bit less optimistic on Emera, given the measurable cut to revenue estimates.

See our latest analysis for Emera

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. Over the past five years, revenues have declined around 1.0% annually. Worse, forecasts are essentially predicting the decline to accelerate, with the estimate for an annualised 11% decline in revenue until the end of 2023. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenue grow 3.0% per year. So it's pretty clear that, while it does have declining revenues, the analysts also expect Emera to suffer worse than the wider industry.

The Bottom Line

The most important thing to take away is that analysts cut their revenue estimates for this year. They're also anticipating slower revenue growth than the wider market. Often, one downgrade can set off a daisy-chain of cuts, especially if an industry is in decline. So we wouldn't be surprised if the market became a lot more cautious on Emera after today.

After a downgrade like this, it's pretty clear that previous forecasts were too optimistic. What's more, we've spotted several possible issues with Emera's business, like dilutive stock issuance over the past year. For more information, you can click here to discover this and the 2 other flags we've identified.

Of course, seeing company management invest large sums of money in a stock can be just as useful as knowing whether analysts are downgrading their estimates. So you may also wish to search this free list of stocks that insiders are buying.

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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.