Earnings Update: Black Hills Corporation (NYSE:BKH) Just Reported Its Annual Results And Analysts Are Updating Their Forecasts

Black Hills Corporation (NYSE:BKH) last week reported its latest yearly results, which makes it a good time for investors to dive in and see if the business is performing in line with expectations. Results look mixed - while revenue fell marginally short of analyst estimates at US$2.3b, statutory earnings beat expectations 3.5%, with Black Hills reporting profits of US$3.91 per share. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.

See our latest analysis for Black Hills

Taking into account the latest results, Black Hills' four analysts currently expect revenues in 2024 to be US$2.37b, approximately in line with the last 12 months. Statutory per-share earnings are expected to be US$3.88, roughly flat on the last 12 months. In the lead-up to this report, the analysts had been modelling revenues of US$2.43b and earnings per share (EPS) of US$3.87 in 2024. So it looks like the analysts have become a bit less optimistic after the latest results announcement, with revenues expected to fall even as the company is supposed to maintain EPS.

The average price target was steady at US$58.33even though revenue estimates declined; likely suggesting the analysts place a higher value on earnings. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. Currently, the most bullish analyst values Black Hills at US$77.00 per share, while the most bearish prices it at US$49.00. These price targets show that analysts do have some differing views on the business, but the estimates do not vary enough to suggest to us that some are betting on wild success or utter failure.

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. We would highlight that Black Hills' revenue growth is expected to slow, with the forecast 1.5% annualised growth rate until the end of 2024 being well below the historical 9.8% p.a. growth over the last five years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 3.1% annually. Factoring in the forecast slowdown in growth, it seems obvious that Black Hills is also expected to grow slower than other industry participants.

The Bottom Line

The most obvious conclusion is that there's been no major change in the business' prospects in recent times, with the analysts holding their earnings forecasts steady, in line with previous estimates. On the negative side, they also downgraded their revenue estimates, and forecasts imply they will perform worse than the wider industry. Yet - earnings are more important to the intrinsic value of the business. The consensus price target held steady at US$58.33, with the latest estimates not enough to have an impact on their price targets.

With that in mind, we wouldn't be too quick to come to a conclusion on Black Hills. Long-term earnings power is much more important than next year's profits. At Simply Wall St, we have a full range of analyst estimates for Black Hills 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 2 warning signs with Black Hills (at least 1 which shouldn't be ignored) , 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.