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The Macquarie Infrastructure Corporation (NYSE:MIC) Analysts Have Been Trimming Their Sales Forecasts

Simply Wall St
·3 min read

One thing we could say about the analysts on Macquarie Infrastructure Corporation (NYSE:MIC) - they aren't optimistic, having just made a major negative revision to their near-term (statutory) forecasts for the organization. There was a fairly draconian cut to their revenue estimates, perhaps an implicit admission that previous forecasts were much too optimistic.

After the downgrade, the consensus from Macquarie Infrastructure's dual analysts is for revenues of US$1.0b in 2021, which would reflect a concerning 31% decline in sales compared to the last year of performance. Prior to the latest estimates, the analysts were forecasting revenues of US$1.3b in 2021. The consensus view seems to have become more pessimistic on Macquarie Infrastructure, noting the pretty serious reduction to revenue estimates in this update.

Check out our latest analysis for Macquarie Infrastructure

earnings-and-revenue-growth
earnings-and-revenue-growth

Additionally, the consensus price target for Macquarie Infrastructure increased 20% to US$42.75, showing a clear increase in optimism from the analysts involved. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. Currently, the most bullish analyst values Macquarie Infrastructure at US$50.00 per share, while the most bearish prices it at US$34.00. 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.

Of course, another way to look at these forecasts is to place them into context against the industry itself. Over the past five years, revenues have declined around 1.1% annually. Worse, forecasts are essentially predicting the decline to accelerate, with the estimate for a 31% decline in revenue next year. Compare this against analyst estimates for companies in the wider industry, which suggest that revenues (in aggregate) are expected to grow 15% next year. So while a broad number of companies are forecast to grow, unfortunately Macquarie Infrastructure is expected to see its sales affected worse than other companies in the industry.

The Bottom Line

The clear low-light was that analysts slashing their revenue forecasts for Macquarie Infrastructure next year. They also expect company revenue to perform worse than the wider market. There was also a nice increase in the price target, with analysts apparently feeling that the intrinsic value of the business is improving. Given the stark change in sentiment, we'd understand if investors became more cautious on Macquarie Infrastructure after today.

Of course, there's always more to the story. At least one of Macquarie Infrastructure's dual analysts has provided estimates out to 2022, which can be seen 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.

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. 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.

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