Metcash Limited (ASX:MTS) Just Reported Half-Yearly Earnings: Have Analysts Changed Their Mind On The Stock?

Investors in Metcash Limited (ASX:MTS) had a good week, as its shares rose 6.1% to close at AU$3.31 following the release of its half-yearly results. It was a credible result overall, with revenues of AU$8.5b and statutory earnings per share of AU$0.26 both in line with analyst estimates, showing that Metcash is executing in line with expectations. 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. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Metcash after the latest results.

See our latest analysis for Metcash

Taking into account the latest results, the current consensus from Metcash's 13 analysts is for revenues of AU$17.4b in 2025. This would reflect a satisfactory 5.2% increase on its revenue over the past 12 months. Statutory earnings per share are predicted to increase 3.9% to AU$0.24. Yet prior to the latest earnings, the analysts had been anticipated revenues of AU$17.4b and earnings per share (EPS) of AU$0.24 in 2025. 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$3.79, implying that the improved earnings outlook is not expected to have a long term impact on value creation for shareholders. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. The most optimistic Metcash analyst has a price target of AU$4.60 per share, while the most pessimistic values it at AU$3.10. Analysts definitely have varying views on the business, but the spread of estimates is not wide enough in our view to suggest that extreme outcomes could await Metcash shareholders.

Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. The analysts are definitely expecting Metcash's growth to accelerate, with the forecast 11% annualised growth to the end of 2025 ranking favourably alongside historical growth of 5.0% per annum over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 3.0% annually. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect Metcash to grow faster than the wider industry.

The Bottom Line

The most important thing here is that the analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards Metcash 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 AU$3.79, with the latest estimates not enough to have an impact on their price targets.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. At Simply Wall St, we have a full range of analyst estimates for Metcash going out to 2027, 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 3 warning signs for Metcash that you need to be mindful 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.