CNA Financial Corporation Earnings Missed Analyst Estimates: Here's What Analysts Are Forecasting Now

CNA Financial Corporation (NYSE:CNA) came out with its first-quarter results last week, and we wanted to see how the business is performing and what industry forecasters think of the company following this report. Revenues of US$3.2b were in line with forecasts, although statutory earnings per share (EPS) came in below expectations at US$1.09, missing estimates by 9.2%. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.

See our latest analysis for CNA Financial

Taking into account the latest results, the most recent consensus for CNA Financial from three analysts is for revenues of US$13.0b in 2023 which, if met, would be a modest 7.3% increase on its sales over the past 12 months. Per-share earnings are expected to shoot up 27% to US$4.20. Before this earnings report, the analysts had been forecasting revenues of US$12.9b and earnings per share (EPS) of US$4.38 in 2023. So it looks like there's been a small decline in overall sentiment after the recent results - there's been no major change to revenue estimates, but the analysts did make a minor downgrade to their earnings per share forecasts.

It might be a surprise to learn that the consensus price target was broadly unchanged at US$46.00, with the analysts clearly implying that the forecast decline in earnings is not expected to have much of an impact on valuation. 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 CNA Financial analyst has a price target of US$52.00 per share, while the most pessimistic values it at US$40.00. Still, with such a tight range of estimates, it suggeststhe analysts have a pretty good idea of what they think the company is worth.

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. The analysts are definitely expecting CNA Financial's growth to accelerate, with the forecast 9.9% annualised growth to the end of 2023 ranking favourably alongside historical growth of 4.5% per annum over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 5.6% annually. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect CNA Financial to grow faster than the wider industry.

The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for CNA Financial. Happily, there were no major changes to revenue forecasts, with the business still expected to grow faster 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.

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 CNA Financial going out to 2024, and you can see them free on our platform here..

That said, it's still necessary to consider the ever-present spectre of investment risk. We've identified 1 warning sign with CNA Financial , and understanding this should be part of your investment process.

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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.