Revenue Beat: Magellan Financial Group Limited Beat Analyst Estimates By 10%

As you might know, Magellan Financial Group Limited (ASX:MFG) recently reported its full-year numbers. Magellan Financial Group beat revenue forecasts by a solid 10% to hit AU$319m. Statutory earnings per share came in at AU$0.93, in line with expectations. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

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Following the recent earnings report, the consensus from nine analysts covering Magellan Financial Group is for revenues of AU$262.1m in 2026. This implies a definite 18% decline in revenue compared to the last 12 months. Statutory earnings per share are forecast to decline 10% to AU$0.86 in the same period. Yet prior to the latest earnings, the analysts had been anticipated revenues of AU$264.1m and earnings per share (EPS) of AU$0.82 in 2026. The analysts seems to have become more bullish on the business, judging by their new earnings per share estimates.

View our latest analysis for Magellan Financial Group

The analysts have been lifting their price targets on the back of the earnings upgrade, with the consensus price target rising 10% to AU$9.91. 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$12.00 per share, while the most bearish prices it at AU$7.65. 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 Magellan Financial Group shareholders.

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. We would also point out that the forecast 18% annualised revenue decline to the end of 2026 is roughly in line with the historical trend, which saw revenues shrink 18% annually over the past five years Compare this against analyst estimates for companies in the broader industry, which suggest that revenues (in aggregate) are expected to grow 5.8% annually. So it's pretty clear that, while it does have declining revenues, the analysts also expect Magellan Financial Group to suffer worse 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 Magellan Financial Group following these results. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting that it's tracking in line with expectations. Although our data does suggest that Magellan Financial Group's revenue 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. We have estimates - from multiple Magellan Financial Group analysts - going out to 2028, and you can see them free on our platform here.

However, before you get too enthused, we've discovered 2 warning signs for Magellan Financial Group (1 is a bit concerning!) that 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.