J.Jill, Inc. (NYSE:JILL) shares fell 7.9% to US$0.78 in the week since its latest annual results. It looks like the results were pretty good overall. While revenues of US$691m were in line with analyst predictions, statutory losses were much smaller than expected, with J.Jill losing US$2.94 per share. This is an important time for investors, as they can track a company's performance in its report, look at what top analysts are forecasting for next year, and see if there has been any change to expectations for the business. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether analysts have changed their mind on J.Jill after the latest results.
Taking into account the latest results, the current consensus, from the twin analysts covering J.Jill, is for revenues of US$666.0m in 2021, which would reflect a small 3.7% reduction in J.Jill's sales over the past 12 months. J.Jill is also expected to turn profitable, with statutory earnings of US$0.11 per share. Yet prior to the latest earnings, analysts had been forecasting revenues of US$680.0m and earnings per share (EPS) of US$0.15 in 2021. From this we can that analyst sentiment has definitely become more bearish after the latest results, leading to lower revenue forecasts and a pretty serious reduction to earnings per share estimates.
The consensus price target fell 20% to US$1.00, with the weaker earnings outlook clearly leading analyst valuation estimates.
Zooming out to look at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up both against past performance, and against industry growth estimates. These estimates imply that sales are expected to slow, with a forecast revenue decline of 3.7% a significant reduction from annual growth of 6.2% over the last five years. Compare this with our data, which suggests that other companies in the same market are, in aggregate, expected to see their revenue grow 5.5% next year. It's pretty clear that J.Jill's revenues are expected to perform substantially worse than the wider market.
The Bottom Line
The biggest concern with the new estimates is that analysts have reduced their earnings per share estimates, suggesting business headwinds could lay ahead for J.Jill. Unfortunately, analysts also downgraded their revenue estimates, and our data indicates revenues are expected to perform worse than the wider market. Even so, earnings per share are more important to the intrinsic value of the business. Analysts also downgraded their price target, suggesting that the latest news has led analysts to become more pessimistic about the intrinsic value of the business.
Even so, the longer term trajectory of the business is much more important for the value creation of shareholders. At least one analyst has provided forecasts out to 2022, which can be seen for free on our platform here.
You can also see whether J.Jill is carrying too much debt, and whether its balance sheet is healthy, for free on our platform here.
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