It's been a good week for Stella-Jones Inc. (TSE:SJ) shareholders, because the company has just released its latest first-quarter results, and the shares gained 9.5% to CA$73.62. It looks to have been a decent result overall - while revenue fell marginally short of analyst estimates at CA$773m, statutory earnings beat expectations by a notable 48%, coming in at CA$1.67 per share. 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. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.

We've found 21 US stocks that are forecast to pay a dividend yield of over 6% next year. See the full list for free.TSX:SJ Earnings and Revenue Growth May 10th 2025

Following the latest results, Stella-Jones' six analysts are now forecasting revenues of CA$3.58b in 2025. This would be a satisfactory 3.1% improvement in revenue compared to the last 12 months. Statutory per-share earnings are expected to be CA$6.02, roughly flat on the last 12 months. In the lead-up to this report, the analysts had been modelling revenues of CA$3.66b and earnings per share (EPS) of CA$5.57 in 2025. So it's pretty clear that while sentiment around revenues has declined following the latest results, the analysts are now more bullish on the company's earnings power.

View our latest analysis for Stella-Jones

The consensus has made no major changes to the price target of CA$83.00, suggesting the forecast improvement in earnings is expected to offset the decline in revenues next year. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. There are some variant perceptions on Stella-Jones, with the most bullish analyst valuing it at CA$94.00 and the most bearish at CA$67.00 per share. There are definitely some different views on the stock, but the range of estimates is not wide enough as to imply that the situation is unforecastable, in our view.

Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. We would highlight that Stella-Jones' revenue growth is expected to slow, with the forecast 4.2% annualised growth rate until the end of 2025 being well below the historical 8.4% p.a. growth over the last five years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 5.1% annually. Factoring in the forecast slowdown in growth, it seems obvious that Stella-Jones is also expected to grow slower than other industry participants.

Story Continues

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 Stella-Jones following these results. On the negative side, they also downgraded their revenue estimates, and forecasts imply they will perform worse than the wider industry. Even so, long term profitability is more important for the value creation process. The consensus price target held steady at CA$83.00, with the latest estimates not enough to have an impact on their price targets.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have forecasts for Stella-Jones going out to 2026, and you can see them free on our platform here.

You still need to take note of risks, for example - Stella-Jones has  2 warning signs  (and 1 which shouldn't be ignored)  we think you should know about.

Have feedback on this article? Concerned about the content?Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.

View Comments