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It's been a pretty great week for Bassett Furniture Industries, Incorporated (NASDAQ:BSET) shareholders, with its shares surging 14% to US$15.15 in the week since its latest third-quarter results. It was a solid earnings report, with revenues and earnings both coming in very strong. Revenues were 15% higher than the analyst had forecast, at US$92m, while the company also delivered a surprise statutory profit, against analyst expectations of a loss. The analyst 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 estimate suggests is in store for next year.
Check out our latest analysis for Bassett Furniture Industries
Taking into account the latest results, the most recent consensus for Bassett Furniture Industries from sole analyst is for revenues of US$418.6m in 2021 which, if met, would be a meaningful 9.8% increase on its sales over the past 12 months. Bassett Furniture Industries is also expected to turn profitable, with statutory earnings of US$0.96 per share. In the lead-up to this report, the analyst had been modelling revenues of US$396.5m and earnings per share (EPS) of US$0.66 in 2021. So it seems there's been a definite increase in optimism about Bassett Furniture Industries' future following the latest results, with a massive increase in the earnings per share forecasts in particular.
With these upgrades, we're not surprised to see that the analyst has lifted their price target 21% to US$17.00per share.
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. For example, we noticed that Bassett Furniture Industries' rate of growth is expected to accelerate meaningfully, with revenues forecast to grow 9.8%, well above its historical decline of 0.02% a year over the past five years. Compare this against analyst estimates for the wider industry, which suggest that (in aggregate) industry revenues are expected to grow 9.3% next year. So it looks like Bassett Furniture Industries is expected to grow at about the same rate as the wider industry.
The Bottom Line
The most important thing here is that the analyst upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards Bassett Furniture Industries following these results. There was also an upgrade to revenue estimates, although as we saw earlier, forecast growth is only expected to be about the same as the wider industry. We note an upgrade to the price target, suggesting that the analyst believes the intrinsic value of the business is likely to improve over time.