Donnelley Financial Solutions, Inc. (NYSE:DFIN) Analysts Are Pretty Bullish On The Stock After Recent Results

Investors in Donnelley Financial Solutions, Inc. (NYSE:DFIN) had a good week, as its shares rose 3.1% to close at US$65.40 following the release of its yearly results. Revenues of US$797m were in line with forecasts, although statutory earnings per share (EPS) came in below expectations at US$2.69, missing estimates by 2.8%. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Donnelley Financial Solutions after the latest results.

See our latest analysis for Donnelley Financial Solutions

Taking into account the latest results, the consensus forecast from Donnelley Financial Solutions' four analysts is for revenues of US$837.7m in 2024. This reflects a modest 5.1% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to increase 6.5% to US$3.01. In the lead-up to this report, the analysts had been modelling revenues of US$825.8m and earnings per share (EPS) of US$3.07 in 2024. So it's pretty clear that, although the analysts have updated their estimates, there's been no major change in expectations for the business following the latest results.

With the analysts reconfirming their revenue and earnings forecasts, it's surprising to see that the price target rose 6.9% to US$66.00. It looks as though they previously had some doubts over whether the business would live up to their expectations. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. Currently, the most bullish analyst values Donnelley Financial Solutions at US$72.00 per share, while the most bearish prices it at US$60.00. The narrow spread of estimates could suggest that the business' future is relatively easy to value, or thatthe analysts have a strong view on its prospects.

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. For example, we noticed that Donnelley Financial Solutions' rate of growth is expected to accelerate meaningfully, with revenues forecast to exhibit 5.1% growth to the end of 2024 on an annualised basis. That is well above its historical decline of 2.0% a year 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 6.6% per year. Although Donnelley Financial Solutions' revenues are expected to improve, it seems that the analysts are still bearish on the business, forecasting it to grow slower than the broader industry.

The Bottom Line

The most important thing to take away is that there's been no major change in sentiment, with the analysts reconfirming that the business is performing in line with their previous earnings per share estimates. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting that it's tracking in line with expectations. Although our data does suggest that Donnelley Financial Solutions' revenue is expected to perform worse than the wider industry. We note an upgrade to the price target, suggesting that the analysts believes the intrinsic value of the business is likely to improve over time.

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. At Simply Wall St, we have a full range of analyst estimates for Donnelley Financial Solutions going out to 2025, and you can see them free on our platform here..

However, before you get too enthused, we've discovered 1 warning sign for Donnelley Financial Solutions 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.