Stella-Jones Inc. Earnings Missed Analyst Estimates: Here's What Analysts Are Forecasting Now

The analysts might have been a bit too bullish on Stella-Jones Inc. (TSE:SJ), given that the company fell short of expectations when it released its third-quarter results last week. Results showed a clear earnings miss, with CA$979m revenue coming in 3.0% lower than what the analystsexpected. Statutory earnings per share (EPS) of CA$0.93 missed the mark badly, arriving some 42% below what was expected. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

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After the latest results, the nine analysts covering Stella-Jones are now predicting revenues of CA$3.72b in 2027. If met, this would reflect a credible 5.2% improvement in revenue compared to the last 12 months. Per-share earnings are expected to bounce 49% to CA$6.07. Before this earnings report, the analysts had been forecasting revenues of CA$3.72b and earnings per share (EPS) of CA$6.07 in 2027. So it's pretty clear that, although the analysts have updated their estimates, there's been no major change in expectations for the business following the latest results.

See our latest analysis for Stella-Jones

The analysts reconfirmed their price target of CA$84.89, showing that the business is executing well and in line with expectations. 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 Stella-Jones at CA$100.00 per share, while the most bearish prices it at CA$66.00. 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.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Stella-Jones' past performance and to peers in the same industry. We would highlight that Stella-Jones' revenue growth is expected to slow, with the forecast 4.1% annualised growth rate until the end of 2027 being well below the historical 5.4% p.a. growth over the last five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 6.5% per year. Factoring in the forecast slowdown in growth, it seems obvious that Stella-Jones 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 plus side, there were no major changes to revenue estimates; although forecasts imply they will perform worse than 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.

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 estimates - from multiple Stella-Jones analysts - going out to 2028, and you can see them free on our platform here.

You should always think about risks though. Case in point, we've spotted 2 warning signs for Stella-Jones you should be aware of.

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