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Auckland International Airport Limited Just Beat EPS By 87%: Here's What Analysts Think Will Happen Next

Simply Wall St

Investors in Auckland International Airport Limited (NZSE:AIA) had a good week, as its shares rose 3.6% to close at NZ$8.65 following the release of its half-year results. Revenues of NZ$375m fell slightly short of expectations, but earnings were a definite bright spot, with statutory per-share profits of NZ$0.43 an impressive 87% ahead of estimates. Analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. So we gathered the latest post-earnings forecasts to see what analysts' statutory forecasts suggest is in store for next year.

See our latest analysis for Auckland International Airport

NZSE:AIA Past and Future Earnings, February 22nd 2020

Taking into account the latest results, Auckland International Airport's eight analysts currently expect revenues in 2020 to be NZ$741.9m, approximately in line with the last 12 months. Statutory earnings per share are expected to dive 48% to NZ$0.22 in the same period. Before this earnings report, analysts had been forecasting revenues of NZ$754.8m and earnings per share (EPS) of NZ$0.22 in 2020. So it's pretty clear that, although analysts have updated their estimates, there's been no major change in expectations for the business following the latest results.

There were no changes to revenue or earnings estimates or the price target of NZ$8.16, suggesting that the company has met expectations in its recent result. 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 Auckland International Airport analyst has a price target of NZ$9.40 per share, while the most pessimistic values it at NZ$6.90. This shows there is still quite a bit of 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.

In addition, we can look to Auckland International Airport's past performance and see whether business is expected to improve, and if the company is expected to perform better than wider market. It's pretty clear that analysts expect Auckland International Airport's revenue growth will slow down substantially, with revenues next year expected to grow 0.5%, compared to a historical growth rate of 9.0% over the past five years. Compare this against other companies (with analyst forecasts) in the market, which are in aggregate expected to see revenue growth of 3.6% next year. Factoring in the forecast slowdown in growth, it seems obvious that analysts still expect Auckland International Airport to grow slower than the wider market.

The Bottom Line

The most obvious conclusion from these results is that there's been no major change in the business' prospects in recent times, with analysts holding earnings per share steady, in line with previous estimates. On the plus side, there were no major changes to revenue estimates; although analyst forecasts imply revenues will perform worse than the wider market. The consensus price target held steady at NZ$8.16, with the latest estimates not enough to have an impact on analysts' estimated valuations.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. At Simply Wall St, we have a full range of analyst estimates for Auckland International Airport going out to 2023, and you can see them free on our platform here..

You can also see whether Auckland International Airport is carrying too much debt, and whether its balance sheet is healthy, for free on our platform here.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned.

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