Yahoo Finance Earnings Miss: Caleres, Inc. Missed EPS By 22% And Analysts Are Revising Their Forecasts
One of the biggest stories of last week was how Caleres, Inc. (NYSE:CAL) shares plunged 26% in the week since its latest full-year results, closing yesterday at US$6.99. It looks like a pretty bad result, all things considered. Although revenues of US$2.9b were in line with analyst predictions, statutory earnings fell badly short, missing estimates by 22% to hit US$1.53 per share. Following the result, 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. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.
Check out our latest analysis for Caleres
Following last week's earnings report, Caleres's five analysts are forecasting 2021 revenues to be US$2.92b, approximately in line with the last 12 months. Statutory earnings per share are expected to jump 30% to US$1.98. Yet prior to the latest earnings, analysts had been forecasting revenues of US$2.98b and earnings per share (EPS) of US$2.42 in 2021. Analysts seem to have become more bearish following the latest results. While there were no changes to revenue forecasts, there was a substantial drop in EPS estimates.
It might be a surprise to learn that the consensus price target fell 29% to US$14.67, with analysts clearly linking lower forecast earnings to the performance of the stock price. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. The most optimistic Caleres analyst has a price target of US$20.00 per share, while the most pessimistic values it at US$9.00. Note the wide gap in analyst price targets? This implies to us that there is a fairly broad range of possible scenarios for the underlying business.
Zooming out to look at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up both against past performance, and against industry growth estimates. It's pretty clear that analysts expect Caleres's revenue growth will slow down substantially, with revenues next year expected to grow 0.07%, compared to a historical growth rate of 3.2% over the past five years. By way of comparison, other companies in this market with analyst coverage, are forecast to grow their revenue at 5.2% per year. Factoring in the forecast slowdown in growth, it seems obvious that analysts still expect Caleres to grow slower than the wider market.
The Bottom Line
The biggest concern with the new estimates is that analysts have reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Caleres. On the plus side, there were no major changes to revenue estimates; although analyst forecasts imply revenues will perform worse than the wider market. The consensus price target fell measurably, with analysts seemingly not reassured by the latest results, leading to a lower estimate of Caleres's future valuation.
Still, the long-term prospects of the business are much more relevant than next year's earnings. We have forecasts for Caleres going out to 2025, and you can see them free on our platform here.
You can also see whether Caleres is carrying too much debt, and whether its balance sheet is healthy, for free on our platform here.
If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. 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. Simply Wall St has no position in the stocks mentioned.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Thank you for reading.
