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Pollard Banknote Limited Just Missed EPS By 38%: Here's What Analysts Think Will Happen Next
It's shaping up to be a tough period for Pollard Banknote Limited (TSE:PBL), which a week ago released some disappointing third-quarter results that could have a notable impact on how the market views the stock. It wasn't a great result overall - while revenue fell marginally short of analyst estimates at CA$159m, statutory earnings missed forecasts by an incredible 38%, coming in at just CA$0.30 per share. 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.
After the latest results, the four analysts covering Pollard Banknote are now predicting revenues of CA$654.9m in 2027. If met, this would reflect a decent 8.0% improvement in revenue compared to the last 12 months. Per-share earnings are expected to shoot up 108% to CA$1.91. Yet prior to the latest earnings, the analysts had been anticipated revenues of CA$659.3m and earnings per share (EPS) of CA$2.03 in 2027. So it looks like there's been a small decline in overall sentiment after the recent results - there's been no major change to revenue estimates, but the analysts did make a minor downgrade to their earnings per share forecasts.
Check out our latest analysis for Pollard Banknote
It might be a surprise to learn that the consensus price target fell 10% to CA$25.56, with the analysts clearly linking lower forecast earnings to the performance of the stock price. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. The most optimistic Pollard Banknote analyst has a price target of CA$31.00 per share, while the most pessimistic values it at CA$21.50. 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.
These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Pollard Banknote's past performance and to peers in the same industry. We can infer from the latest estimates that forecasts expect a continuation of Pollard Banknote'shistorical trends, as the 6.4% annualised revenue growth to the end of 2027 is roughly in line with the 6.5% annual 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 6.3% per year. So although Pollard Banknote is expected to maintain its revenue growth rate, it's only growing at about the rate of the wider industry.
The Bottom Line
The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Pollard Banknote. Happily, there were no real changes to revenue forecasts, with the business still expected to grow in line with the overall industry. The consensus price target fell measurably, with the analysts seemingly not reassured by the latest results, leading to a lower estimate of Pollard Banknote's future valuation.
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 forecasts for Pollard Banknote going out to 2027, and you can see them free on our platform here.
Even so, be aware that Pollard Banknote is showing 1 warning sign in our investment analysis , you should know about...
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