Yahoo Finance Earnings Update: Here's Why Analysts Just Lifted Their Freightways Group Limited (NZSE:FRW) Price Target To NZ$9.19
The half-year results for Freightways Group Limited (NZSE:FRW) were released last week, making it a good time to revisit its performance. It was a workmanlike result, with revenues of NZ$621m coming in 4.0% ahead of expectations, and statutory earnings per share of NZ$0.43, in line with analyst appraisals. 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. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Freightways Group after the latest results.
See our latest analysis for Freightways Group
Taking into account the latest results, Freightways Group's four analysts currently expect revenues in 2024 to be NZ$1.20b, approximately in line with the last 12 months. Statutory per share are forecast to be NZ$0.40, approximately in line with the last 12 months. Before this earnings report, the analysts had been forecasting revenues of NZ$1.20b and earnings per share (EPS) of NZ$0.39 in 2024. So the consensus seems to have become somewhat more optimistic on Freightways Group's earnings potential following these results.
The analysts have been lifting their price targets on the back of the earnings upgrade, with the consensus price target rising 6.5% to NZ$9.19. 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. Currently, the most bullish analyst values Freightways Group at NZ$9.55 per share, while the most bearish prices it at NZ$8.83. The narrow spread of estimates could suggest that the business' future is relatively easy to value, or thatthe analysts have a strong view on its prospects.
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 Freightways Group's revenue growth is expected to slow, with the forecast 2.2% annualised growth rate until the end of 2024 being well below the historical 15% 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 5.0% annually. Factoring in the forecast slowdown in growth, it seems obvious that Freightways Group is also expected to grow slower than other industry participants.
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 Freightways Group following these results. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting that it's tracking in line with expectations. Although our data does suggest that Freightways Group's revenue is expected to perform worse than the wider industry. We note an upgrade to the price target, suggesting that the analysts believes the intrinsic value of the business is likely to improve over time.
Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have estimates - from multiple Freightways Group analysts - going out to 2026, and you can see them free on our platform here.
You should always think about risks though. Case in point, we've spotted 2 warning signs for Freightways Group you should be aware of.
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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.
