Last week saw the newest second-quarter earnings release from Employers Holdings, Inc. (NYSE:EIG), an important milestone in the company's journey to build a stronger business. Employers Holdings missed revenue estimates by 3.0%, coming in atUS$217m, although statutory earnings per share (EPS) of US$1.25 beat expectations, coming in 2.5% ahead of analyst estimates. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.
Taking into account the latest results, the current consensus from Employers Holdings' two analysts is for revenues of US$891.5m in 2024. This would reflect a reasonable 2.6% increase on its revenue over the past 12 months. Statutory earnings per share are expected to decrease 8.4% to US$4.40 in the same period. Before this earnings report, the analysts had been forecasting revenues of US$905.0m and earnings per share (EPS) of US$3.99 in 2024. There was no real change to the revenue estimates, but the analysts do seem more bullish on earnings, given the solid gain to earnings per share expectations following these results.
There's been no major changes to the consensus price target of US$52.50, suggesting that the improved earnings per share outlook is not enough to have a long-term positive impact on the stock's valuation.
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. It's clear from the latest estimates that Employers Holdings' rate of growth is expected to accelerate meaningfully, with the forecast 5.2% annualised revenue growth to the end of 2024 noticeably faster than its historical growth of 1.5% p.a. over the past five years. Other similar companies in the industry (with analyst coverage) are also forecast to grow their revenue at 5.1% per year. Factoring in the forecast acceleration in revenue, it's pretty clear that Employers Holdings is expected to grow at about the same rate as the wider 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 Employers Holdings following these results. Happily, there were no real changes to revenue forecasts, with the business still expected to grow in line with the overall industry. The consensus price target held steady at US$52.50, 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. At least one analyst has provided forecasts out to 2025, which can be seen for free on our platform here.
And what about risks? Every company has them, and we've spotted 1 warning sign for Employers Holdings you should know about.
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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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