Yahoo Finance Canadian Western Bank Just Recorded A 13% EPS Beat: Here's What Analysts Are Forecasting Next
Shareholders might have noticed that Canadian Western Bank (TSE:CWB) filed its first-quarter result this time last week. The early response was not positive, with shares down 4.2% to CA$26.75 in the past week. Revenues disappointed slightly, as sales of CA$273m were 2.9% below what the analysts had predicted. Profits were a relative bright spot, with statutory per-share earnings of CA$0.99 coming in 13% above what was anticipated. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.
View our latest analysis for Canadian Western Bank
Following the latest results, Canadian Western Bank's eleven analysts are now forecasting revenues of CA$1.13b in 2023. This would be a reasonable 7.2% improvement in sales compared to the last 12 months. Per-share earnings are expected to accumulate 4.8% to CA$3.45. Yet prior to the latest earnings, the analysts had been anticipated revenues of CA$1.16b and earnings per share (EPS) of CA$3.56 in 2023. It's pretty clear that pessimism has reared its head after the latest results, leading to a weaker revenue outlook and a small dip in earnings per share estimates.
Despite the cuts to forecast earnings, there was no real change to the CA$30.85 price target, showing that the analysts don't think the changes have a meaningful impact on its intrinsic value. 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. There are some variant perceptions on Canadian Western Bank, with the most bullish analyst valuing it at CA$35.00 and the most bearish at CA$28.00 per share. With such a narrow range of valuations, the analysts apparently share similar views on what they think the business is worth.
Of course, another way to look at these forecasts is to place them into context against the industry itself. We can infer from the latest estimates that forecasts expect a continuation of Canadian Western Bank'shistorical trends, as the 9.8% annualised revenue growth to the end of 2023 is roughly in line with the 8.5% annual revenue growth over the past five years. Compare this with the broader industry, which analyst estimates (in aggregate) suggest will see revenues grow 5.4% annually. So although Canadian Western Bank is expected to maintain its revenue growth rate, it's definitely expected to grow faster than 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 Canadian Western Bank. Regrettably, they also downgraded their revenue estimates, but the latest forecasts still imply the business will grow faster than the wider industry. The consensus price target held steady at CA$30.85, with the latest estimates not enough to have an impact on their price targets.
With that in mind, we wouldn't be too quick to come to a conclusion on Canadian Western Bank. Long-term earnings power is much more important than next year's profits. We have forecasts for Canadian Western Bank going out to 2025, and you can see them free on our platform here.
Don't forget that there may still be risks. For instance, we've identified 2 warning signs for Canadian Western Bank (1 can't be ignored) you should be aware of.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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.
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