Yahoo Finance Magellan Aerospace Corporation Just Missed EPS By 38%: Here's What Analysts Think Will Happen Next
It's been a good week for Magellan Aerospace Corporation (TSE:MAL) shareholders, because the company has just released its latest yearly results, and the shares gained 5.9% to CA$8.67. It looks like a pretty bad result, all things considered. Although revenues of CA$880m were in line with analyst predictions, statutory earnings fell badly short, missing estimates by 38% to hit CA$0.16 per share. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.
See our latest analysis for Magellan Aerospace
Taking into account the latest results, the consensus forecast from Magellan Aerospace's two analysts is for revenues of CA$995.3m in 2024. This reflects a decent 13% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to surge 337% to CA$0.70. In the lead-up to this report, the analysts had been modelling revenues of CA$951.6m and earnings per share (EPS) of CA$0.69 in 2024. So there seems to have been a moderate uplift in sentiment following the latest results, given the upgrades to both revenue and earnings per share forecasts for next year.
Althoughthe analysts have upgraded their earnings estimates, there was no change to the consensus price target of CA$13.00, suggesting that the forecast performance does not have a long term impact on the company's valuation.
Of course, another way to look at these forecasts is to place them into context against the industry itself. One thing stands out from these estimates, which is that Magellan Aerospace is forecast to grow faster in the future than it has in the past, with revenues expected to display 13% annualised growth until the end of 2024. If achieved, this would be a much better result than the 5.6% annual decline over the past five years. Compare this against analyst estimates for the broader industry, which suggest that (in aggregate) industry revenues are expected to grow 8.1% annually. Not only are Magellan Aerospace's revenues expected to improve, it seems that the analysts are also expecting it to grow faster than the wider industry.
The Bottom Line
The most important thing here is that the analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards Magellan Aerospace following these results. Happily, they also upgraded their revenue estimates, and are forecasting them to grow faster 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.
With that in mind, we wouldn't be too quick to come to a conclusion on Magellan Aerospace. Long-term earnings power is much more important than next year's profits. We have analyst estimates for Magellan Aerospace going out as far as 2025, and you can see them free on our platform here.
It might also be worth considering whether Magellan Aerospace's debt load is appropriate, using our debt analysis tools on the Simply Wall St 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.
