Investors in Steelcase Inc. (NYSE:SCS) had a good week, as its shares rose 9.6% to close at US$13.70 following the release of its first-quarter results. The result was positive overall - although revenues of US$727m were in line with what the analysts predicted, Steelcase surprised by delivering a statutory profit of US$0.09 per share, modestly greater than expected. 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.

After the latest results, the four analysts covering Steelcase are now predicting revenues of US$3.25b in 2025. If met, this would reflect a modest 3.8% improvement in revenue compared to the last 12 months. Per-share earnings are expected to ascend 10% to US$0.84. Before this earnings report, the analysts had been forecasting revenues of US$3.27b and earnings per share (EPS) of US$0.82 in 2025. So the consensus seems to have become somewhat more optimistic on Steelcase's earnings potential following these results.

The analysts have been lifting their price targets on the back of the earnings upgrade, with the consensus price target rising 6.9% to US$16.67. 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 Steelcase at US$18.00 per share, while the most bearish prices it at US$16.00. This is a very narrow spread of estimates, implying either that Steelcase is an easy company to value, or - more likely - the analysts are relying heavily on some key assumptions.

One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. For example, we noticed that Steelcase's rate of growth is expected to accelerate meaningfully, with revenues forecast to exhibit 5.0% growth to the end of 2025 on an annualised basis. That is well above its historical decline of 2.1% a year over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenue grow 6.6% per year. So although Steelcase's revenue growth is expected to improve, it is still expected to grow slower than the 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 Steelcase following these results. On the plus side, there were no major changes to revenue estimates; although forecasts imply they will perform worse than the wider industry. We note an upgrade to the price target, suggesting that the analysts believes the intrinsic value of the business is likely to improve over time.

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. At Simply Wall St, we have a full range of analyst estimates for Steelcase going out to 2027, and you can see them free on our platform here..

However, before you get too enthused, we've discovered 1 warning sign for Steelcase that 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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