It's been a sad week for PotlatchDeltic Corporation (NASDAQ:PCH), who've watched their investment drop 11% to US$41.85 in the week since the company reported its quarterly result. PotlatchDeltic reported in line with analyst predictions, delivering revenues of US$313m and statutory earnings per share of US$1.20, suggesting the business is executing well and in line with its plan. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.
Following the latest results, PotlatchDeltic's six analysts are now forecasting revenues of US$976.4m in 2021. This would be a reasonable 7.7% improvement in sales compared to the last 12 months. Statutory earnings per share are predicted to shoot up 29% to US$1.50. Before this earnings report, the analysts had been forecasting revenues of US$941.1m and earnings per share (EPS) of US$1.46 in 2021. So there seems to have been a moderate uplift in sentiment following the latest results, given the upgrades to both revenue and earnings per share forecasts for next year.
Despite these upgrades,the analysts have not made any major changes to their price target of US$49.67, suggesting that the higher estimates are not likely to have a long term impact on what the stock is worth. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. Currently, the most bullish analyst values PotlatchDeltic at US$52.00 per share, while the most bearish prices it at US$48.00. Even so, with a relatively close grouping of estimates, it looks like the analysts are quite confident in their valuations, suggesting PotlatchDeltic is an easy business to forecast or the the analysts are all using similar assumptions.
Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. It's pretty clear that there is an expectation that PotlatchDeltic's revenue growth will slow down substantially, with revenues next year expected to grow 7.7%, compared to a historical growth rate of 11% over the past five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 6.0% next year. Even after the forecast slowdown in growth, it seems obvious that PotlatchDeltic is also expected to grow faster than the wider industry.
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 PotlatchDeltic following these results. Happily, they also upgraded their revenue estimates, and are forecasting revenues to grow faster than the wider industry. The consensus price target held steady at US$49.67, with the latest estimates not enough to have an impact on their price targets.
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 PotlatchDeltic going out to 2022, and you can see them free on our platform here..
Even so, be aware that PotlatchDeltic is showing 3 warning signs in our investment analysis , and 1 of those doesn't sit too well with us...
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.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email firstname.lastname@example.org.