Yahoo Finance Manawa Energy Limited (NZSE:MNW) Analysts Just Cut Their EPS Forecasts Substantially
One thing we could say about the analysts on Manawa Energy Limited (NZSE:MNW) - they aren't optimistic, having just made a major negative revision to their near-term (statutory) forecasts for the organization. Both revenue and earnings per share (EPS) estimates were cut sharply as the analysts factored in the latest outlook for the business, concluding that they were too optimistic previously.
After this downgrade, Manawa Energy's five analysts are now forecasting revenues of NZ$394m in 2023. This would be a huge 49% improvement in sales compared to the last 12 months. Statutory earnings per share are presumed to bounce 76% to NZ$0.20. Previously, the analysts had been modelling revenues of NZ$439m and earnings per share (EPS) of NZ$0.48 in 2023. Indeed, we can see that the analysts are a lot more bearish about Manawa Energy's prospects, administering a measurable cut to revenue estimates and slashing their EPS estimates to boot.
See our latest analysis for Manawa Energy
It'll come as no surprise then, to learn that the analysts have cut their price target 7.7% to NZ$6.07. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. The most optimistic Manawa Energy analyst has a price target of NZ$8.45 per share, while the most pessimistic values it at NZ$4.50. This is a fairly broad spread of estimates, suggesting that the analysts are forecasting a wide range of possible outcomes for the business.
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. One thing stands out from these estimates, which is that Manawa Energy is forecast to grow faster in the future than it has in the past, with revenues expected to display 49% annualised growth until the end of 2023. If achieved, this would be a much better result than the 17% annual decline over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in the industry are forecast to see their revenue grow 0.4% per year. So it looks like Manawa Energy is expected to grow faster than its competitors, at least for a while.
The Bottom Line
The most important thing to take away is that analysts cut their earnings per share estimates, expecting a clear decline in business conditions. Unfortunately, analysts also downgraded their revenue estimates, although our data indicates revenues are expected to perform better than the wider market. After such a stark change in sentiment from analysts, we'd understand if readers now felt a bit wary of Manawa Energy.
Worse yet, our risk analysis suggests that Manawa Energy may find it hard to maintain its dividend following these downgrades. You can learn more, and discover the 1 possible risk we've identified, for free 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 downgrading their estimates. So you may also wish to search this free list of stocks that insiders are buying.
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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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