Some of you may have seen it last week, first american financial company (NYSE:FAF) announced its quarterly financial results to the market. Initial reaction was not positive, with the stock falling 4.2% to US$54.22 over the past week. Overall, the results were not very good. Sales of US$1.4 billion were in line with analysts' forecasts, but earnings were below expectations, falling 17% below the statutory forecast of US$0.45 per share. The analysts have updated their earnings model following these results, but it would be good to know whether they think there's been a big change to the company's outlook, or if it's business as usual. So we've collected the latest post-earnings statutory consensus forecasts to see what's in store for next year.
Check out our latest analysis for First American Financial.
Taking into account the latest results, the latest consensus for First American Financial from four analysts is for sales of US$6.3b in 2024. If this is met, it would mean sales have increased by a satisfying 5.3% over the past 12 months. Earnings per share are expected to increase 76% to US$3.71. However, before the latest results, analysts had been forecasting sales of US$6.36b and earnings per share (EPS) of US$3.90 in 2024. Analysts seem to have become a bit more passive on the business following the latest results. Next year's earnings per share figure will be slightly lowered.
It may be surprising to learn that the consensus price target fell 5.1% to $67.00, with analysts clearly linking downward earnings estimates to share price performance. However, there is another way to think about price targets. The key is to pay attention to the range of price targets offered by analysts. This is because a wide range of estimates can suggest diverse views on possible outcomes for your business. The most optimistic First American Financial analyst has a price target of $70 per share, while the most pessimistic has a price target of $65. A narrow spread of estimates can suggest that the business' prospects are relatively easy to evaluate, or that the analysts have a strong view on its prospects.
One way to get more context about these forecasts is to compare them to their past performance and to the performance of other companies in the same industry. As evidenced by the latest estimates, First American Financial's growth rate is expected to accelerate significantly, with its forecast revenue growth of 7.1% per annum through the end of 2024, compared to its historical rate of 2.7% per annum over the past five years. significantly faster than growth. Other similar companies in the industry (covered by analysts) are also expected to grow their revenue at 6.0% per year. First American Financial is expected to grow at about the same rate as its industry, so it's not clear whether we can draw any conclusions from its growth rate compared to its competitors.
conclusion
Most importantly, the analysts have revised down their earnings per share estimates, indicating a clear drop in sentiment following the results. They also reaffirmed their revenue forecast, which projects the company to grow at roughly the same rate as the industry as a whole. Additionally, the analysts have also lowered their price targets, suggesting that the latest news has increased their pessimism about the business's intrinsic value.
That said, the long-term trajectory of the company's earnings is far more important than next year. At Simply Wall St, we have all analyst forecasts for First American Financial going out to 2025, available for free on our platform here.
Before you take the next step, you need to know the following: 1 warning sign for First American Financial What we discovered.
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This article by Simply Wall St is general in nature. We provide commentary using only unbiased methodologies, based on historical data and analyst forecasts, and articles are not intended to be financial advice. This is not a recommendation to buy or sell any stock, and does not take into account your objectives or financial situation. We aim to provide long-term, focused analysis based on fundamental data. Note that our analysis may not factor in the latest announcements or qualitative material from price-sensitive companies. Simply Wall St has no position in any stocks mentioned.
