Yahoo Finance The Metro Inc. (TSE:MRU) First-Quarter Results Are Out And Analysts Have Published New Forecasts
Metro Inc. (TSE:MRU) came out with its first-quarter results last week, and we wanted to see how the business is performing and what industry forecasters think of the company following this report. Metro reported CA$5.0b in revenue, roughly in line with analyst forecasts, although statutory earnings per share (EPS) of CA$0.99 beat expectations, being 2.1% higher than what the analysts expected. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Metro after the latest results.
See our latest analysis for Metro
Taking into account the latest results, Metro's eight analysts currently expect revenues in 2024 to be CA$21.2b, approximately in line with the last 12 months. Statutory per share are forecast to be CA$4.26, approximately in line with the last 12 months. In the lead-up to this report, the analysts had been modelling revenues of CA$21.2b and earnings per share (EPS) of CA$4.55 in 2024. So it looks like there's been a small decline in overall sentiment after the recent results - there's been no major change to revenue estimates, but the analysts did make a minor downgrade to their earnings per share forecasts.
The consensus price target held steady at CA$76.50, with the analysts seemingly voting that their lower forecast earnings are not expected to lead to a lower stock price in the foreseeable future. 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. There are some variant perceptions on Metro, with the most bullish analyst valuing it at CA$82.00 and the most bearish at CA$69.00 per share. Even so, with a relatively close grouping of estimates, it looks like the analysts are quite confident in their valuations, suggesting Metro is an easy business to forecast or the the analysts are all using similar assumptions.
Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. We would highlight that Metro's revenue growth is expected to slow, with the forecast 0.5% annualised growth rate until the end of 2024 being well below the historical 4.8% p.a. growth over the last five years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 3.7% annually. Factoring in the forecast slowdown in growth, it seems obvious that Metro is also expected to grow slower than other industry participants.
The Bottom Line
The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Metro. On the plus side, there were no major changes to revenue estimates; although forecasts imply they will perform worse than the wider industry. The consensus price target held steady at CA$76.50, with the latest estimates not enough to have an impact on their price targets.
Following on from that line of thought, we think that 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 Metro going out to 2026, and you can see them free on our platform here..
Before you take the next step you should know about the 2 warning signs for Metro that we have uncovered.
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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.