Earnings Update: NRW Holdings Limited (ASX:NWH) Just Reported Its Annual Results And Analysts Are Updating Their Forecasts

It's been a good week for NRW Holdings Limited (ASX:NWH) shareholders, because the company has just released its latest yearly results, and the shares gained 10.0% to AU$1.88. The result was fairly weak overall, with revenues of AU$2.2b being 2.1% less than what the analysts had been modelling. 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.

View our latest analysis for NRW Holdings

After the latest results, the six analysts covering NRW Holdings are now predicting revenues of AU$2.48b in 2022. If met, this would reflect a meaningful 11% improvement in sales compared to the last 12 months. Statutory earnings per share are predicted to surge 76% to AU$0.22. In the lead-up to this report, the analysts had been modelling revenues of AU$2.50b and earnings per share (EPS) of AU$0.21 in 2022. The analysts seems to have become more bullish on the business, judging by their new earnings per share estimates.

The consensus price target was unchanged at AU$2.57, implying that the improved earnings outlook is not expected to have a long term impact on value creation for shareholders. 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. The most optimistic NRW Holdings analyst has a price target of AU$3.10 per share, while the most pessimistic values it at AU$2.15. 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. It's pretty clear that there is an expectation that NRW Holdings' revenue growth will slow down substantially, with revenues to the end of 2022 expected to display 11% growth on an annualised basis. This is compared to a historical growth rate of 43% over the past five years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 14% annually. So it's pretty clear that, while revenue growth is expected to slow down, the wider industry is also expected to grow faster than NRW Holdings.

The Bottom Line

The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around NRW Holdings' earnings potential next year. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting sales are tracking in line with expectations - although our data does suggest that NRW Holdings' revenues are expected to perform worse than the wider industry. The consensus price target held steady at AU$2.57, with the latest estimates not enough to have an impact on their price targets.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. At Simply Wall St, we have a full range of analyst estimates for NRW Holdings going out to 2024, and you can see them free on our platform here..

You still need to take note of risks, for example - NRW Holdings has 5 warning signs we think you should be aware of.

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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.
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