Stewart Information Services Corporation Just Recorded A 41% EPS Beat: Here's What Analysts Are Forecasting Next
As you might know, Stewart Information Services Corporation (NYSE:STC) just kicked off its latest quarterly results with some very strong numbers. The company beat both earnings and revenue forecasts, with revenue of US$596m, some 2.4% above estimates, and statutory earnings per share (EPS) coming in at US$2.21, 41% ahead of expectations. 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. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.
See our latest analysis for Stewart Information Services
Taking into account the latest results, the current consensus from Stewart Information Services' dual analysts is for revenues of US$2.21b in 2021, which would reflect a reasonable 7.2% increase on its sales over the past 12 months. Statutory earnings per share are predicted to swell 16% to US$4.59. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$2.07b and earnings per share (EPS) of US$3.92 in 2021. So it seems there's been a definite increase in optimism about Stewart Information Services' future following the latest results, with a nice gain to the earnings per share forecasts in particular.
With these upgrades, we're not surprised to see that the analysts have lifted their price target 12% to US$52.50per share.
These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Stewart Information Services' past performance and to peers in the same industry. One thing stands out from these estimates, which is that Stewart Information Services is forecast to grow faster in the future than it has in the past, with revenues expected to grow 7.2%. If achieved, this would be a much better result than the 0.8% annual decline over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in the industry are forecast to see their revenue grow 4.8% per year. So it looks like Stewart Information Services 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 Stewart Information Services following these results. Pleasantly, they also upgraded their revenue estimates, and their forecasts suggest the business is expected to grow faster than the wider industry. There was also a nice increase in the price target, with the analysts clearly feeling that the intrinsic value of the business is improving.
Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have analyst estimates for Stewart Information Services going out as far as 2022, and you can see them free on our platform here.
You still need to take note of risks, for example - Stewart Information Services has 2 warning signs we think you should be aware of.
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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