Yahoo Finance Industry Analysts Just Made A Meaningful Upgrade To Their Mainfreight Limited (NZSE:MFT) Revenue Forecasts
Mainfreight Limited (NZSE:MFT) shareholders will have a reason to smile today, with the analysts making substantial upgrades to this year's statutory forecasts. The consensus estimated revenue numbers rose, with their view now clearly much more bullish on the company's business prospects. The market may be pricing in some blue sky too, with the share price gaining 12% to NZ$76.00 in the last 7 days. We'll be curious to see if these new estimates convince the market to lift the stock price higher still.
After the upgrade, the five analysts covering Mainfreight are now predicting revenues of NZ$6.2b in 2023. If met, this would reflect a solid 18% improvement in sales compared to the last 12 months. Statutory earnings per share are presumed to jump 25% to NZ$4.41. Before this latest update, the analysts had been forecasting revenues of NZ$5.5b and earnings per share (EPS) of NZ$4.02 in 2023. Sentiment certainly seems to have improved in recent times, with a nice gain to revenue and a small increase to earnings per share estimates.
See our latest analysis for Mainfreight
Despite these upgrades, the analysts have not made any major changes to their price target of NZ$97.47, suggesting that the higher estimates are not likely to have a long term impact on what the stock is worth. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. Currently, the most bullish analyst values Mainfreight at NZ$122 per share, while the most bearish prices it at NZ$84.00. There are definitely some different views on the stock, but the range of estimates is not wide enough as to imply that the situation is unforecastable, in our view.
Of course, another way to look at these forecasts is to place them into context against the industry itself. The analysts are definitely expecting Mainfreight's growth to accelerate, with the forecast 18% annualised growth to the end of 2023 ranking favourably alongside historical growth of 14% per annum over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 4.1% per year. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect Mainfreight to grow faster than the wider industry.
The Bottom Line
The biggest takeaway for us from these new estimates is that analysts upgraded their earnings per share estimates, with improved earnings power expected for this year. Fortunately, analysts also upgraded their revenue estimates, and our data indicates sales are expected to perform better than the wider market. Given that analysts appear to be expecting substantial improvement in the sales pipeline, now could be the right time to take another look at Mainfreight.
Better yet, our automated discounted cash flow calculation (DCF) suggests Mainfreight could be moderately undervalued. You can learn more about our valuation methodology on our platform here.
Of course, seeing company management invest large sums of money in a stock can be just as useful as knowing whether analysts are upgrading their estimates. So you may also wish to search this free list of stocks that insiders are buying.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
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.
Join A Paid User Research Session
You’ll receive a US$30 Amazon Gift card for 1 hour of your time while helping us build better investing tools for the individual investors like yourself. Sign up here
