Meridian Energy Limited Just Missed Earnings And Its Revenue Numbers Were Weaker Than Expected
Investors in Meridian Energy Limited (NZSE:MEL) had a good week, as its shares rose 2.7% to close at NZ$5.98 following the release of its half-year results. Results look mixed - while revenue fell marginally short of analyst estimates at NZ$2.1b, statutory earnings were in line with expectations, at NZ$0.037 per share. The 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. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.
Check out our latest analysis for Meridian Energy
Taking into account the latest results, the current consensus from Meridian Energy's four analysts is for revenues of NZ$4.39b in 2024. This would reflect a notable 14% increase on its revenue over the past 12 months. Per-share earnings are expected to surge 294% to NZ$0.13. In the lead-up to this report, the analysts had been modelling revenues of NZ$4.36b and earnings per share (EPS) of NZ$0.13 in 2024. The analysts seem to have become a little more negative on the business after the latest results, given the minor downgrade to their earnings per share numbers for next year.
The consensus price target held steady at NZ$5.40, with the analysts seemingly voting that their lower forecast earnings are not expected to lead to a lower stock price in the foreseeable future. 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 Meridian Energy at NZ$6.50 per share, while the most bearish prices it at NZ$4.80. As you can see, analysts are not all in agreement on the stock's future, but the range of estimates is still reasonably narrow, which could suggest that the outcome is not totally unpredictable.
Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. The analysts are definitely expecting Meridian Energy's growth to accelerate, with the forecast 29% annualised growth to the end of 2024 ranking favourably alongside historical growth of 1.8% per annum over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 8.6% annually. Factoring in the forecast acceleration in revenue, it's pretty clear that Meridian Energy is expected to grow much faster than its industry.
The Bottom Line
The most important thing to take away is that the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. Fortunately, they also reconfirmed their revenue numbers, suggesting that it's tracking in line with expectations. Additionally, our data suggests that revenue is expected to grow faster than the wider industry. The consensus price target held steady at NZ$5.40, with the latest estimates not enough to have an impact on their price targets.
Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. We have estimates - from multiple Meridian Energy analysts - going out to 2026, and you can see them free on our platform here.
Plus, you should also learn about the 1 warning sign we've spotted with Meridian Energy .
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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.
