It's been a good week for Globe Life Inc. (NYSE:GL) shareholders, because the company has just released its latest quarterly results, and the shares gained 3.9% to US$86.48. The result was positive overall - although revenues of US$1.2b were in line with what the analysts predicted, Globe Life surprised by delivering a statutory profit of US$1.76 per share, modestly greater than expected. 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've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.
After the latest results, the five analysts covering Globe Life are now predicting revenues of US$4.91b in 2021. If met, this would reflect a modest 5.7% improvement in sales compared to the last 12 months. Statutory earnings per share are predicted to grow 11% to US$7.41. Before this earnings report, the analysts had been forecasting revenues of US$4.87b and earnings per share (EPS) of US$7.38 in 2021. The consensus analysts don't seem to have seen anything in these results that would have changed their view on the business, given there's been no major change to their estimates.
There were no changes to revenue or earnings estimates or the price target of US$92.29, suggesting that the company has met expectations in its recent result. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. Currently, the most bullish analyst values Globe Life at US$109 per share, while the most bearish prices it at US$81.00. This shows there is still a bit of diversity in estimates, but analysts don't appear to be totally split on the stock as though it might be a success or failure situation.
Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. We can infer from the latest estimates that forecasts expect a continuation of Globe Life'shistorical trends, as next year's 5.7% revenue growth is roughly in line with 4.8% annual revenue growth over the past five years. Juxtapose this against our data, which suggests that other companies (with analyst coverage) in the industry are forecast to see their revenues grow 4.8% per year. So although Globe Life is expected to maintain its revenue growth rate, it's only growing at about the rate of the wider industry.
The Bottom Line
The most important thing to take away is that there's been no major change in sentiment, with the analysts reconfirming that the business is performing in line with their previous earnings per share estimates. They also reconfirmed their revenue estimates, with the company predicted to grow at about the same rate as 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.
With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have forecasts for Globe Life going out to 2022, and you can see them free on our platform here.
You can also see whether Globe Life is carrying too much debt, and whether its balance sheet is healthy, for free on our platform here.
This article by Simply Wall St is general in nature. 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.
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