Yahoo Finance News Flash: Analysts Just Made A Substantial Upgrade To Their Mercury NZ Limited (NZSE:MCY) Forecasts
Mercury NZ Limited (NZSE:MCY) shareholders will have a reason to smile today, with the analysts making substantial upgrades to this year's forecasts. The consensus estimated revenue numbers rose, with their view now clearly much more bullish on the company's business prospects.
Following the upgrade, the latest consensus from Mercury NZ's four analysts is for revenues of NZ$2.2b in 2023, which would reflect a notable 12% improvement in sales compared to the last 12 months. Statutory earnings per share are anticipated to plummet 54% to NZ$0.15 in the same period. Previously, the analysts had been modelling revenues of NZ$2.0b and earnings per share (EPS) of NZ$0.14 in 2023. Sentiment certainly seems to have improved in recent times, with a decent improvement in revenue and a slight bump in earnings per share estimates.
Check out our latest analysis for Mercury NZ
Although the analysts have upgraded their earnings estimates, there was no change to the consensus price target of NZ$6.17, suggesting that the forecast performance does not have a long term impact on the company's valuation. 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 Mercury NZ at NZ$7.30 per share, while the most bearish prices it at NZ$4.50. This shows there is still some diversity in estimates, but analysts don't appear to be totally split on the stock as though it might be a success or failure situation.
These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Mercury NZ's past performance and to peers in the same industry. We can infer from the latest estimates that forecasts expect a continuation of Mercury NZ'shistorical trends, as the 12% annualised revenue growth to the end of 2023 is roughly in line with the 11% annual revenue growth over the past year. Compare this with the broader industry (in aggregate), which analyst estimates suggest will see revenues fall 1.4% per year. So not only is Mercury NZ expected to maintain its revenue growth despite the wider downturn, it's also forecast to grow faster than the industry as a whole.
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. On the plus side, they also lifted their revenue estimates, and the company is 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 Mercury NZ.
Analysts are definitely bullish on Mercury NZ, but no company is perfect. Indeed, you should know that there are several potential concerns to be aware of, including dilutive stock issuance over the past year. You can learn more, and discover the 2 other flags we've identified, for free on our platform here.
Another way to search for interesting companies that could be reaching an inflection point is to track whether management are buying or selling, with our free list of growing companies 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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