One thing we could say about the analysts on The Hartford Financial Services Group, Inc. (NYSE:HIG) - they aren't optimistic, having just made a major negative revision to their near-term (statutory) forecasts for the organization. There was a fairly draconian cut to their revenue estimates, perhaps an implicit admission that previous forecasts were much too optimistic.
Following the latest downgrade, Hartford Financial Services Group's ten analysts currently expect revenues in 2021 to be US$21b, approximately in line with the last 12 months. Statutory earnings per share are presumed to rise 3.1% to US$6.15. Prior to this update, the analysts had been forecasting revenues of US$21b and earnings per share (EPS) of US$6.15 in 2021. So it's pretty clear that, although the analysts have updated their estimates, there's been no major change in expectations for the business.
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. It's pretty clear that there is an expectation that Hartford Financial Services Group's revenue growth will slow down substantially, with revenues to the end of 2021 expected to display 0.8% growth on an annualised basis. This is compared to a historical growth rate of 5.8% over the past five years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 3.6% annually. Factoring in the forecast slowdown in growth, it seems obvious that Hartford Financial Services Group is also expected to grow slower than other industry participants.
The Bottom Line
The most important thing to take away is that there's been no major change in sentiment, with analysts reconfirming that earnings per share are expected to continue performing in line with their prior expectations. There were no major changes to revenue forecasts, with analysts still expecting the business to grow slower than the wider market. Given the stark change in sentiment, we'd understand if investors became more cautious on Hartford Financial Services Group after today.
Still, the long-term prospects of the business are much more relevant than next year's earnings. We have estimates - from multiple Hartford Financial Services Group analysts - going out to 2023, and you can see them free on our platform here.
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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