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Earnings Release: Here's Why Analysts Cut Their Metro Performance Glass Limited (NZSE:MPG) Price Target To NZ$0.44

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Shareholders might have noticed that Metro Performance Glass Limited (NZSE:MPG) filed its annual result this time last week. The early response was not positive, with shares down 7.3% to NZ$0.26 in the past week. This is an important time for investors, as they can track a company's performance in its report, look at what expert is forecasting for next year, and see if there has been any change to expectations for the business. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analyst has changed their mind on Metro Performance Glass after the latest results.

See our latest analysis for Metro Performance Glass

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earnings-and-revenue-growth

After the latest results, the sole analyst covering Metro Performance Glass are now predicting revenues of NZ$263.0m in 2023. If met, this would reflect a notable 11% improvement in sales compared to the last 12 months. Metro Performance Glass is also expected to turn profitable, with statutory earnings of NZ$0.02 per share. Before this earnings report, the analyst had been forecasting revenues of NZ$253.0m and break-even in 2023. So it seems there's been a definite increase in optimism about Metro Performance Glass' future following the latest results, with a the earnings per share forecasts in particular.

As a result, it might be a surprise to see thatthe analyst has cut their price target 6.4% to NZ$0.44, which could suggest the forecast improvement in performance is not expected to last.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Metro Performance Glass' past performance and to peers in the same industry. For example, we noticed that Metro Performance Glass' rate of growth is expected to accelerate meaningfully, with revenues forecast to exhibit 11% growth to the end of 2023 on an annualised basis. That is well above its historical decline of 3.0% a year 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 6.7% per year. So it looks like Metro Performance Glass is expected to grow faster than its competitors, at least for a while.

The Bottom Line

The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around Metro Performance Glass' earnings potential next year. Happily, they also upgraded their revenue estimates, and are forecasting revenues to grow faster than the wider industry. Furthermore, the analyst also cut their price targets, suggesting that the latest news has led to greater pessimism about the intrinsic value of the business.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have analyst estimates for Metro Performance Glass going out as far as 2025, and you can see them free on our platform here.

However, before you get too enthused, we've discovered 2 warning signs for Metro Performance Glass that you should be aware of.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.