Nickel Industries Limited Earnings Missed Analyst Estimates: Here's What Analysts Are Forecasting Now

It's been a good week for Nickel Industries Limited (ASX:NIC) shareholders, because the company has just released its latest full-year results, and the shares gained 2.2% to AU$0.70. Revenues of US$1.9b were in line with forecasts, although statutory earnings per share (EPS) came in below expectations at US$0.037, missing estimates by 7.7%. 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. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

See our latest analysis for Nickel Industries

Following the recent earnings report, the consensus from five analysts covering Nickel Industries is for revenues of US$1.77b in 2024. This implies a measurable 6.1% decline in revenue compared to the last 12 months. Statutory earnings per share are predicted to bounce 25% to US$0.035. Before this earnings report, the analysts had been forecasting revenues of US$1.75b and earnings per share (EPS) of US$0.037 in 2024. So it looks like there's been a small decline in overall sentiment after the recent results - there's been no major change to revenue estimates, but the analysts did make a minor downgrade to their earnings per share forecasts.

The consensus price target held steady at AU$1.03, with the analysts seemingly voting that their lower forecast earnings are not expected to lead to a lower stock price in the foreseeable future. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. There are some variant perceptions on Nickel Industries, with the most bullish analyst valuing it at AU$1.53 and the most bearish at AU$0.80 per share. Note the wide gap in analyst price targets? This implies to us that there is a fairly broad range of possible scenarios for the underlying business.

Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. These estimates imply that revenue is expected to slow, with a forecast annualised decline of 6.1% by the end of 2024. This indicates a significant reduction from annual growth of 42% over the last five years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 1.2% annually for the foreseeable future. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Nickel Industries is expected to lag the wider industry.

The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Nickel Industries. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting that it's tracking in line with expectations. Although our data does suggest that Nickel Industries' revenue is expected to perform worse than the wider industry. The consensus price target held steady at AU$1.03, 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. We have estimates - from multiple Nickel Industries analysts - going out to 2025, and you can see them free on our platform here.

Don't forget that there may still be risks. For instance, we've identified 3 warning signs for Nickel Industries 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.