Churchill Downs Incorporated Just Beat Analyst Forecasts, And Analysts Have Been Updating Their Predictions

Churchill Downs Incorporated (NASDAQ:CHDN) just released its quarterly report 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. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.

Check out our latest analysis for Churchill Downs

Following the latest results, Churchill Downs' eleven analysts are now forecasting revenues of US$2.72b in 2024. This would be a meaningful 9.0% improvement in revenue compared to the last 12 months. Per-share earnings are expected to jump 24% to US$5.77. 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. The analysts seems to have become more bullish on the business, judging by their new earnings per share estimates.

The consensus price target was unchanged at US$147, implying that the improved earnings outlook is not expected to have a long term impact on value creation for shareholders. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. Currently, the most bullish analyst values Churchill Downs at US$156 per share, while the most bearish prices it at US$135. Still, with such a tight range of estimates, it suggeststhe analysts have a pretty good idea of what they think the company is worth.

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. We would highlight that Churchill Downs' revenue growth is expected to slow, with the forecast 12% annualised growth rate until the end of 2024 being well below the historical 18% p.a. growth over the last five years. Compare this to the 151 other companies in this industry with analyst coverage, which are forecast to grow their revenue at 9.8% per year. So it's pretty clear that, while Churchill Downs' revenue growth is expected to slow, it's expected to grow roughly in line with the industry.

The Bottom Line

The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around Churchill Downs' earnings potential next year. 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.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have forecasts for Churchill Downs going out to 2026, and you can see them free on our platform here.

It is also worth noting that we have found 2 warning signs for Churchill Downs (1 shouldn't be ignored!) that you need to take into consideration.

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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.