It's been a good week for Middlesex Water Company (NASDAQ:MSEX) shareholders, because the company has just released its latest first-quarter results, and the shares gained 3.5% to US$62.10. It was an okay report, and revenues came in at US$32m, approximately in line with analyst estimates leading up to the results announcement. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.
Taking into account the latest results, the current consensus from Middlesex Water's two analysts is for revenues of US$138.8m in 2020, which would reflect an okay 2.3% increase on its sales over the past 12 months. Before this earnings result, the analysts had predicted US$140.2m revenue in 2020, although there was no accompanying EPS estimate. Overall it looks like Middlesex Water is performing in line with expectations, giventhe analysts have updated their numbers and there's been no real change to next year's forecast following these results.
Additionally, the consensus price target for Middlesex Water rose 8.1% to US$71.33, showing a clear increase in optimism from the the analysts involved.
One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. Next year brings more of the same, according to the analysts, with revenue forecast to grow 2.3%, in line with its 2.3% annual growth over the past five years. Compare this with the wider industry (in aggregate), which analyst estimates suggest will see revenues grow 7.3% next year. So although Middlesex Water is expected to maintain its revenue growth rate, it's forecast to grow slower than the wider industry.
The Bottom Line
The most important thing to take away is that the analysts reconfirmed their revenue estimates for next year, suggesting that the business is performing in line with expectations. On the plus side, there were no major changes to revenue estimates; although forecasts imply revenues will perform worse than the wider industry. We note an upgrade to the price target, suggesting that the analysts believes the intrinsic value of the business is likely to improve over time.
We have estimates for Middlesex Water from its two analysts out to 2021, and you can see them free on our platform here.
We don't want to rain on the parade too much, but we did also find 2 warning signs for Middlesex Water (1 is a bit concerning!) that you need to be mindful of.
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