Investors in Sun Life Financial Inc. (TSE:SLF) had a good week, as its shares rose 3.7% to close at CA$66.44 following the release of its annual results. Revenues of CA$40b were in line with forecasts, although statutory earnings per share (EPS) came in below expectations at CA$4.40, missing estimates by 2.8%. Earnings are an important time for investors, as they can track a company's performance, look at what top analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.
Following the recent earnings report, the consensus fromeleven analysts covering Sun Life Financial expects revenues of CA$37.0b in 2020, implying a discernible 6.6% decline in sales compared to the last 12 months. Statutory earnings per share are expected to shoot up 23% to CA$5.44. Yet prior to the latest earnings, analysts had been forecasting revenues of CA$36.6b and earnings per share (EPS) of CA$5.44 in 2020. So it's pretty clear that, although analysts have updated their estimates, there's been no major change in expectations for the business following the latest results.
There were no changes to revenue or earnings estimates or the price target of CA$65.38, suggesting that the company has met expectations in its recent result. The consensus price target just an average of individual analyst targets, so - considering that the price target changed, it would be handy to see how wide the range of underlying estimates is. There are some variant perceptions on Sun Life Financial, with the most bullish analyst valuing it at CA$72.00 and the most bearish at CA$51.00 per share. Analysts definitely have varying views on the business, but the spread of estimates is not wide enough in our view to suggest that extreme outcomes could await Sun Life Financial shareholders.
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 sales are expected to reverse, with the forecast 6.6% revenue decline a notable change from historical growth of 9.4% over the last five years. By contrast, our data suggests that other companies (with analyst coverage) in the same market are forecast to see their revenue grow 0.1% annually for the foreseeable future. It's pretty clear that Sun Life Financial's revenues are expected to perform substantially worse than the wider market.
The Bottom Line
The most obvious conclusion from these results is that there's been no major change in the business' prospects in recent times, with analysts holding earnings per share steady, in line with previous estimates. On the plus side, there were no major changes to revenue estimates; although analyst forecasts imply revenues will perform worse than the wider market. The consensus price target held steady at CA$65.38, with the latest estimates not enough to have an impact on analysts' estimated valuations.
With that said, the long-term trajectory of the company's earnings is a lot more important than next year. At Simply Wall St, we have a full range of analyst estimates for Sun Life Financial going out to 2021, and you can see them free on our platform here..
Another thing to consider is whether management and directors have been buying or selling stock recently. We provide an overview of all open market stock trades for the last twelve months on our platform, here.
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