Results: CNO Financial Group, Inc. Exceeded Expectations And The Consensus Has Updated Its Estimates

As you might know, CNO Financial Group, Inc. (NYSE:CNO) just kicked off its latest quarterly results with some very strong numbers. It was a solid earnings report, with revenues and statutory earnings per share (EPS) both coming in strong. Revenues were 15% higher than the analysts had forecast, at US$1.1b, while EPS were US$1.06 beating analyst models by 48%. 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. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

See our latest analysis for CNO Financial Group

After the latest results, the consensus from CNO Financial Group's four analysts is for revenues of US$3.68b in 2024, which would reflect a considerable 15% decline in revenue compared to the last year of performance. Statutory earnings per share are expected to shrink 8.3% to US$3.72 in the same period. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$3.75b and earnings per share (EPS) of US$3.41 in 2024. The analysts seems to have become more bullish on the business, judging by their new earnings per share estimates.

The consensus price target rose 11% to US$33.00, suggesting that higher earnings estimates flow through to the stock's valuation as well. 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. Currently, the most bullish analyst values CNO Financial Group at US$38.00 per share, while the most bearish prices it at US$29.00. This is a very narrow spread of estimates, implying either that CNO Financial Group is an easy company to value, or - more likely - the analysts are relying heavily on some key assumptions.

Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. These estimates imply that revenue is expected to slow, with a forecast annualised decline of 28% by the end of 2024. This indicates a significant reduction from annual growth of 0.8% over the last five years. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 5.1% per year. It's pretty clear that CNO Financial Group's revenues are expected to perform substantially worse than the wider industry.

The Bottom Line

The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around CNO Financial Group's earnings potential next year. On the plus side, there were no major changes to revenue estimates; although forecasts imply they will perform worse than the wider industry. There was also a nice increase in the price target, with the analysts clearly feeling that the intrinsic value of the business is improving.

With that in mind, we wouldn't be too quick to come to a conclusion on CNO Financial Group. Long-term earnings power is much more important than next year's profits. We have forecasts for CNO Financial Group going out to 2026, and you can see them free on our platform here.

You still need to take note of risks, for example - CNO Financial Group has 2 warning signs we think 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com