Magellan Financial Group Limited Beat Analyst Estimates: See What The Consensus Is Forecasting For This Year

Magellan Financial Group Limited (ASX:MFG) defied analyst predictions to release its interim results, which were ahead of market expectations. It was overall a positive result, with revenues beating expectations by 6.7% to hit AU$169m. Magellan Financial Group reported statutory earnings per share (EPS) AU$0.57, which was a notable 10% above what the analysts had forecast. 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 gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.

See our latest analysis for Magellan Financial Group

Taking into account the latest results, the eleven analysts covering Magellan Financial Group provided consensus estimates of AU$296.0m revenue in 2024, which would reflect a substantial 26% decline over the past 12 months. Statutory earnings per share are expected to descend 19% to AU$0.91 in the same period. In the lead-up to this report, the analysts had been modelling revenues of AU$272.9m and earnings per share (EPS) of AU$0.76 in 2024. There's been a pretty noticeable increase in sentiment, with the analysts upgrading revenues and making a sizeable expansion in earnings per share in particular.

With these upgrades, we're not surprised to see that the analysts have lifted their price target 6.7% to AU$8.70per share. 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 Magellan Financial Group at AU$10.25 per share, while the most bearish prices it at AU$7.40. This shows there is still a bit of 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.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Magellan Financial Group's past performance and to peers in the same industry. One more thing stood out to us about these estimates, and it's the idea that Magellan Financial Group's decline is expected to accelerate, with revenues forecast to fall at an annualised rate of 46% to the end of 2024. This tops off a historical decline of 8.5% a year over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenue grow 4.0% per year. So while a broad number of companies are forecast to grow, unfortunately Magellan Financial Group is expected to see its revenue affected worse than other companies in the 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 Magellan Financial Group following these results. Fortunately, they also upgraded their revenue estimates, although our data indicates it is expected to perform worse than the wider industry. There was also a nice increase in the price target, with the analysts clearly feeling that the intrinsic value of the business is improving.

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 Magellan Financial Group going out to 2026, 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 Magellan Financial Group (1 doesn't sit too well with us!) that you need to be mindful 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.