Western Forest Products Inc. (TSE:WEF) Third-Quarter Results Just Came Out: Here's What Analysts Are Forecasting For Next Year
Investors in Western Forest Products Inc. (TSE:WEF) had a good week, as its shares rose 3.4% to close at CA$15.38 following the release of its third-quarter results. Overall the results were a little better than the analysts were expecting, with revenues beating forecasts by 4.2%to hit CA$237m. Following the result, the 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. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.
Following the latest results, Western Forest Products' three analysts are now forecasting revenues of CA$1.00b in 2027. This would be a decent 14% improvement in revenue compared to the last 12 months. Losses are predicted to fall substantially, shrinking 22% to CA$2.12. Before this latest report, the consensus had been expecting revenues of CA$1.00b and CA$2.73 per share in losses. While the revenue estimates were largely unchanged, sentiment seems to have improved, with the analysts upgrading their numbers and making a considerable decrease in losses per share in particular.
View our latest analysis for Western Forest Products
The average price target held steady at CA$17.75, seeming to indicate that business is performing in line with expectations. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. Currently, the most bullish analyst values Western Forest Products at CA$20.00 per share, while the most bearish prices it at CA$16.00. Even so, with a relatively close grouping of estimates, it looks like the analysts are quite confident in their valuations, suggesting Western Forest Products is an easy business to forecast or the the analysts are all using similar assumptions.
Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. One thing stands out from these estimates, which is that Western Forest Products is forecast to grow faster in the future than it has in the past, with revenues expected to display 11% annualised growth until the end of 2027. If achieved, this would be a much better result than the 11% annual decline over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in the industry are forecast to see their revenue grow 6.3% per year. Not only are Western Forest Products' revenues expected to improve, it seems that the analysts are also expecting it to grow faster than the wider industry.
The Bottom Line
The most important thing to take away is that the analysts reconfirmed their loss per share estimates for next year. Fortunately, they also reconfirmed their revenue numbers, suggesting that it's tracking in line with expectations. Additionally, our data suggests that revenue is expected to grow faster than the wider industry. The consensus price target held steady at CA$17.75, with the latest estimates not enough to have an impact on their price targets.
Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. We have forecasts for Western Forest Products going out to 2028, and you can see them free on our platform here.
Plus, you should also learn about the 2 warning signs we've spotted with Western Forest Products (including 1 which is concerning) .
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