Dalrymple Bay Infrastructure Limited Just Missed Earnings - But Analysts Have Updated Their Models

Dalrymple Bay Infrastructure Limited (ASX:DBI) last week reported its latest half-year results, which makes it a good time for investors to dive in and see if the business is performing in line with expectations. Statutory earnings per share of AU$0.07 unfortunately missed expectations by 15%, although it was encouraging to see revenues of AU$306m exceed expectations by 6.8%. 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. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Dalrymple Bay Infrastructure after the latest results.

View our latest analysis for Dalrymple Bay Infrastructure

After the latest results, the consensus from Dalrymple Bay Infrastructure's five analysts is for revenues of AU$624.0m in 2023, which would reflect a measurable 7.4% decline in revenue compared to the last year of performance. Statutory earnings per share are forecast to dip 3.8% to AU$0.19 in the same period. Before this earnings report, the analysts had been forecasting revenues of AU$609.6m and earnings per share (EPS) of AU$0.15 in 2023. So it seems there's been a definite increase in optimism about Dalrymple Bay Infrastructure's future following the latest results, with a sizeable expansion in the earnings per share forecasts in particular.

Althoughthe analysts have upgraded their earnings estimates, there was no change to the consensus price target of AU$2.90, suggesting that the forecast performance does not have a long term impact on the company's valuation. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. Currently, the most bullish analyst values Dalrymple Bay Infrastructure at AU$3.30 per share, while the most bearish prices it at AU$2.66. This is a very narrow spread of estimates, implying either that Dalrymple Bay Infrastructure is an easy company to value, or - more likely - the analysts are relying heavily on some key assumptions.

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. These estimates imply that revenue is expected to slow, with a forecast annualised decline of 14% by the end of 2023. This indicates a significant reduction from annual growth of 26% over the last three years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 8.1% annually for the foreseeable future. It's pretty clear that Dalrymple Bay Infrastructure's revenues are expected to perform substantially worse than the wider industry.

The Bottom Line

The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around Dalrymple Bay Infrastructure's earnings potential next year. Fortunately, they also upgraded their revenue estimates, although our data indicates it is expected to perform worse than the wider industry. The consensus price target held steady at AU$2.90, with the latest estimates not enough to have an impact on their price targets.

Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. We have estimates - from multiple Dalrymple Bay Infrastructure analysts - going out to 2025, and you can see them free on our platform here.

Plus, you should also learn about the 3 warning signs we've spotted with Dalrymple Bay Infrastructure (including 2 which are a bit concerning) .

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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.