Sinclair, Inc. Reported A Surprise Loss, And Analysts Have Updated Their Forecasts

Last week saw the newest full-year earnings release from Sinclair, Inc. (NASDAQ:SBGI), an important milestone in the company's journey to build a stronger business. Things were not great overall, with a surprise (statutory) loss of US$4.46 per share on revenues of US$3.1b, even though the analysts had been expecting a profit. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.

View our latest analysis for Sinclair

Taking into account the latest results, the consensus forecast from Sinclair's seven analysts is for revenues of US$3.52b in 2024. This reflects a solid 12% improvement in revenue compared to the last 12 months. Sinclair is also expected to turn profitable, with statutory earnings of US$3.40 per share. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$3.54b and earnings per share (EPS) of US$3.11 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 was unchanged at US$16.43, implying that the improved earnings outlook is not expected to have a long term impact on value creation for shareholders. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. The most optimistic Sinclair analyst has a price target of US$29.00 per share, while the most pessimistic values it at US$10.00. With such a wide range in price targets, analysts are almost certainly betting on widely divergent outcomes in the underlying business. With this in mind, we wouldn't rely too heavily the consensus price target, as it is just an average and analysts clearly have some deeply divergent views on the business.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Sinclair's past performance and to peers in the same industry. For example, we noticed that Sinclair's rate of growth is expected to accelerate meaningfully, with revenues forecast to exhibit 12% growth to the end of 2024 on an annualised basis. That is well above its historical decline of 0.4% a year over the past five years. Compare this against analyst estimates for the broader industry, which suggest that (in aggregate) industry revenues are expected to grow 3.6% annually. So it looks like Sinclair is expected to grow faster than its competitors, at least for a while.

The Bottom Line

The most important thing here is that the analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards Sinclair following these results. Fortunately, they also reconfirmed their revenue numbers, suggesting that it's tracking in line with expectations. Additionally, our data suggests that revenue is 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. We have forecasts for Sinclair going out to 2026, 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 3 warning signs with Sinclair (at least 1 which is concerning) , and understanding these 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.