One of the biggest stories of last week was how TrueBlue, Inc. (NYSE:TBI) shares plunged 24% in the week since its latest yearly results, closing yesterday at US$16.83. It looks like the results were a bit of a negative overall. While revenues of US$2.4b were in line with analyst predictions, statutory earnings were less than expected, missing estimates by 3.1% to hit US$1.61 per share. This is an important time for investors, as they can track a company’s performance in its report, look at what top analysts are forecasting for next year, and see if there has been any change to expectations for the business. With this in mind, we’ve gathered the latest statutory forecasts to see what analysts are expecting for next year.
See our latest analysis for TrueBlue
Taking into account the latest results, the five analysts covering TrueBlue provided consensus estimates of US$2.30b revenue in 2020, which would reflect a small 2.9% decline on its sales over the past 12 months. Statutory earnings per share are expected to crater 20% to US$1.29 in the same period. Yet prior to the latest earnings, analysts had been forecasting revenues of US$2.31b and earnings per share (EPS) of US$1.56 in 2020. Analysts seem to have become more bearish following the latest results. While there were no changes to revenue forecasts, there was a real cut to EPS estimates.
It might be a surprise to learn that the consensus price target was broadly unchanged at US$20.25, with analysts clearly implying that the forecast decline in earnings is not expected to have much of an impact on valuation. The consensus price target just an average of individual analyst targets, so – considering that the price target changed, it would be handy to see how wide the range of underlying estimates is. There are some variant perceptions on TrueBlue, with the most bullish analyst valuing it at US$22.00 and the most bearish at US$17.00 per share. The narrow spread of estimates could suggest that the business’ future is relatively easy to value, or that analysts have a clear view on its prospects.
It can be useful to take a broader overview by seeing how analyst forecasts compare, both to the TrueBlue’s past performance and to peers in the same market. One obvious concern is that although revenues are forecast to continue shrinking, the expected 2.9% decline next year is substantially more severe than the 0.7% annual decline over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in the market are forecast to see their revenue decline 6.8% per year. It seems clear that while revenues are expected to continue declining, analysts also expect the downturn to be more severe than that of the wider market.
The Bottom Line
The most important thing to take away is that analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. On the plus side, there were no major changes to revenue estimates; although analyst forecasts imply revenues will perform worse than the wider market. 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.
Still, the long-term prospects of the business are much more relevant than next year’s earnings. We have estimates – from multiple TrueBlue analysts – going out to 2021, and you can see them free on our platform here.
We also provide an overview of the TrueBlue Board and CEO remuneration and length of tenure at the company, and whether insiders have been buying the stock, here.
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