Advertisement
Australia markets closed
  • ALL ORDS

    8,153.70
    +80.10 (+0.99%)
     
  • ASX 200

    7,896.90
    +77.30 (+0.99%)
     
  • AUD/USD

    0.6512
    -0.0007 (-0.10%)
     
  • OIL

    83.11
    -0.06 (-0.07%)
     
  • GOLD

    2,254.80
    +16.40 (+0.73%)
     
  • Bitcoin AUD

    107,309.70
    -1,047.73 (-0.97%)
     
  • CMC Crypto 200

    885.54
    0.00 (0.00%)
     
  • AUD/EUR

    0.6041
    +0.0007 (+0.11%)
     
  • AUD/NZD

    1.0903
    +0.0000 (+0.00%)
     
  • NZX 50

    12,105.29
    +94.63 (+0.79%)
     
  • NASDAQ

    18,254.69
    -26.15 (-0.14%)
     
  • FTSE

    7,952.62
    +20.64 (+0.26%)
     
  • Dow Jones

    39,807.37
    +47.29 (+0.12%)
     
  • DAX

    18,492.49
    +15.40 (+0.08%)
     
  • Hang Seng

    16,541.42
    +148.58 (+0.91%)
     
  • NIKKEI 225

    40,369.44
    +201.37 (+0.50%)
     

Aurizon Holdings Limited Beat Analyst Estimates: See What The Consensus Is Forecasting For Next Year

Aurizon Holdings Limited (ASX:AZJ) investors will be delighted, with the company turning in some strong numbers with its latest results. It was overall a positive result, with revenues beating expectations by 2.8% to hit AU$1.5b. Aurizon Holdings also reported a statutory profit of AU$0.18, which was an impressive 34% above what analysts had forecast. 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 Aurizon Holdings

ASX:AZJ Past and Future Earnings, February 12th 2020
ASX:AZJ Past and Future Earnings, February 12th 2020

Taking into account the latest results, Aurizon Holdings's eleven analysts currently expect revenues in 2020 to be AU$3.01b, approximately in line with the last 12 months. Statutory per-share earnings are expected to be AU$0.29, roughly flat on the last 12 months. Before this earnings report, analysts had been forecasting revenues of AU$2.99b and earnings per share (EPS) of AU$0.28 in 2020. Analysts seem to have become more bullish on the business, judging by their new earnings per share estimates.

ADVERTISEMENT

The consensus price target was unchanged at AU$5.65, implying that the improved earnings outlook is not expected to have a long term impact on value creation for shareholders. 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. The most optimistic Aurizon Holdings analyst has a price target of AU$6.30 per share, while the most pessimistic values it at AU$4.20. This shows there is still quite 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.

It can also be useful to step back and take a broader view of how analyst forecasts compare to Aurizon Holdings's performance in recent years. From these estimates it looks as though analysts expect the years of declining sales to come to an end, given the flat revenue forecast for next year. That would be a definite improvement, given that the past five years have seen sales shrink five years annually. Compare this against analyst estimates for the wider market, which suggest that (in aggregate) market revenues are expected to grow 5.0% next year. So it's pretty clear that, although revenues are improving, Aurizon Holdings is still expected to grow slower than the market.

The Bottom Line

The biggest takeaway for us from these new estimates is that the consensus upgraded its earnings per share estimates, showing a clear improvement in sentiment around Aurizon Holdings's earnings potential next year. Fortunately, analysts also reconfirmed their revenue estimates, suggesting sales are tracking in line with expectations - although our data does suggest that Aurizon Holdings's revenues are expected to perform worse than the wider market. 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.

Still, the long-term prospects of the business are much more relevant than next year's earnings. At Simply Wall St, we have a full range of analyst estimates for Aurizon Holdings going out to 2023, and you can see them free on our platform here..

You can also view our analysis of Aurizon Holdings's balance sheet, and whether we think Aurizon Holdings is carrying too much debt, for free on our platform here.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Thank you for reading.