Churchill Downs Incorporated (NASDAQ:CHDN) just released its latest first-quarter results and things are looking bullish. The company beat forecasts, with revenue of US$591m, some 4.4% above estimates, and statutory earnings per share (EPS) coming in at US$1.08, 42% ahead of expectations. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.

After the latest results, the ten analysts covering Churchill Downs are now predicting revenues of US$2.71b in 2024. If met, this would reflect a notable 8.7% improvement in revenue compared to the last 12 months. Per-share earnings are expected to shoot up 27% to US$5.91. Before this earnings report, the analysts had been forecasting revenues of US$2.69b and earnings per share (EPS) of US$5.25 in 2024. There was no real change to the revenue estimates, but the analysts do seem more bullish on earnings, given the nice increase in earnings per share expectations following these results.

The consensus price target was unchanged at US$145, implying that the improved earnings outlook is not expected to have a long term impact on value creation for shareholders. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. Currently, the most bullish analyst values Churchill Downs at US$156 per share, while the most bearish prices it at US$135. The narrow spread of estimates could suggest that the business' future is relatively easy to value, or thatthe analysts have a strong view on its prospects.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Churchill Downs' past performance and to peers in the same industry. It's pretty clear that there is an expectation that Churchill Downs' revenue growth will slow down substantially, with revenues to the end of 2024 expected to display 12% growth on an annualised basis. This is compared to a historical growth rate of 18% over the past five years. Compare this to the 152 other companies in this industry with analyst coverage, which are forecast to grow their revenue at 9.7% per year. Factoring in the forecast slowdown in growth, it looks like Churchill Downs is forecast 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 Churchill Downs following these results. They also reconfirmed their revenue estimates, with the company predicted to grow at about the same rate as the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.

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 estimates - from multiple Churchill Downs analysts - going out to 2026, and you can see them free on our platform here.

However, before you get too enthused, we've discovered 2 warning signs for Churchill Downs (1 is concerning!) that you should be aware of.

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