As you might know, ProAssurance Corporation (NYSE:PRA) just kicked off its latest first-quarter results with some very strong numbers. The company beat forecasts, with revenue of US$285m, some 4.7% above estimates, and statutory earnings per share (EPS) coming in at US$0.09, 177% ahead of expectations. 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. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.
Following the recent earnings report, the consensus from five analysts covering ProAssurance is for revenues of US$1.11b in 2024. This implies a perceptible 3.7% decline in revenue compared to the last 12 months. Earnings are expected to improve, with ProAssurance forecast to report a statutory profit of US$0.23 per share. In the lead-up to this report, the analysts had been modelling revenues of US$1.10b and earnings per share (EPS) of US$0.25 in 2024. The analysts seem to have become a little more negative on the business after the latest results, given the minor downgrade to their earnings per share numbers for next year.
The consensus price target held steady at US$16.75, with the analysts seemingly voting that their lower forecast earnings are not expected to lead to a lower stock price in the foreseeable future. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. There are some variant perceptions on ProAssurance, with the most bullish analyst valuing it at US$22.00 and the most bearish at US$14.00 per share. This shows there is still a bit of diversity in estimates, but analysts don't appear to be totally split on the stock as though it might be a success or failure situation.
These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the ProAssurance's past performance and to peers in the same industry. These estimates imply that revenue is expected to slow, with a forecast annualised decline of 4.8% by the end of 2024. This indicates a significant reduction from annual growth of 5.5% over the last five years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 5.9% annually for the foreseeable future. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - ProAssurance is expected to lag the wider industry.
The Bottom Line
The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for ProAssurance. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting that it's tracking in line with expectations. Although our data does suggest that ProAssurance's revenue is expected to perform worse than 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.
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 ProAssurance going out to 2025, and you can see them free on our platform here.
You can also see whether ProAssurance is carrying too much debt, and whether its balance sheet is healthy, for free on our platform here.
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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.