TORONTO — The company missed its earnings per share forecasts by 7.5%. Its radio stations in key markets such as Canada’s largest, Toronto, lag those of its competitors.
Corus Entertainment has its challenges, and analysts in Canada are now revising their forecasts, Simply Wall Street notes.
“It looks like the results were a bit of a negative overall,” it says of the media company’s recently released fiscal Q1 2020 results, which RBR+TVBR covered on Jan. 10, 2020.
“While revenues of CA $468 million were in line with analyst predictions, statutory earnings were less than expected, missing estimates by 7.5% to hit CA $0.37 per share,” the financial blog notes. “Corus Entertainment’s eight analysts are forecasting 2020 revenues to be CA $1.67 billion, approximately in line with the last 12 months.”
Before this earnings result, analysts had predicted CA $1.67 billion revenue in 2020, although there was no accompanying EPS estimate.
“From what we can see of these results, it looks like Corus Entertainment is performing in line with analyst expectations,” Simply Wall St. notes. “The analysts we track have all updated their numbers following the results, and there were no major changes to their forecasts for next year.”
Further, there’s been no real change to the consensus price target of CA $8.00, with Corus Entertainment seemingly executing in line with expectations, it adds.
But, Simply Wall St. says this “could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. The most optimistic Corus Entertainment analyst has a price target of CA $11.00 per share, while the most pessimistic values it at CA $6.00. 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.”
Further, the blog highlights that sales are expected to reverse, with the forecast 0.9% revenue decline “a notable change from historical growth of 17% over the last five years. Compare this with our data, which suggests that other companies in the same market are, in aggregate, expected to see their revenue grow 2.4% next year. It’s pretty clear that Corus Entertainment’s revenues are expected to perform substantially worse than the wider market.”
— Carina Newton, in Toronto, and Adam Jacobson in Miami