Investors in Pitney Bowes Inc. (NYSE:PBI) had a good week, as its shares rose 8.0% to close at US$4.61 following the release of its full-year results. It was not a great result overall. While revenues of US$3.5b were in line with analyst predictions, earnings were less than expected, missing statutory estimates by 19% to hit US$0.21 per share. 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 collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.

Check out our latest analysis for Pitney Bowes

Taking into account the latest results, Pitney Bowes' twin analysts currently expect revenues in 2023 to be US$3.51b, approximately in line with the last 12 months. Per-share earnings are expected to increase 8.3% to US$0.23. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$3.61b and earnings per share (EPS) of US$0.36 in 2023. The analysts seem less optimistic after the recent results, reducing their sales forecasts and making a pretty serious reduction to earnings per share numbers.

The consensus price target fell 9.5% to US$4.75, with the weaker earnings outlook clearly leading valuation estimates.

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 sales are expected to reverse, with a forecast 0.7% annualised revenue decline to the end of 2023. That is a notable change from historical growth of 4.1% 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 6.8% annually for the foreseeable future. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Pitney Bowes 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 Pitney Bowes. On the negative side, they also downgraded their revenue estimates, and forecasts imply revenues will perform worse than the wider industry. Furthermore, the analysts also cut their price targets, suggesting that the latest news has led to greater pessimism about the intrinsic value of the business.

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 analyst estimates for Pitney Bowes going out as far as 2024, and you can see them free on our platform here.

And what about risks? Every company has them, and we've spotted 3 warning signs for Pitney Bowes (of which 2 are a bit unpleasant!) 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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