Upgrade: Analysts Just Made A Captivating Increase To Their Duxton Water Limited (ASX:D2O) Forecasts

Celebrations may be in order for Duxton Water Limited (ASX:D2O) shareholders, with the covering analyst delivering a significant upgrade to their statutory estimates for the company. Consensus estimates suggest investors could expect greatly increased statutory revenues and earnings per share, with the analyst modelling a real improvement in business performance.

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Following the latest upgrade, the current consensus, from the single analyst covering Duxton Water, is for revenues of AU$46m in 2025, which would reflect a measurable 3.7% reduction in Duxton Water's sales over the past 12 months. Statutory earnings per share are anticipated to reduce 8.8% to AU$0.15 in the same period. Before this latest update, the analyst had been forecasting revenues of AU$39m and earnings per share (EPS) of AU$0.12 in 2025. There has definitely been an improvement in perception recently, with the analyst substantially increasing both their earnings and revenue estimates.

View our latest analysis for Duxton Water

Although the analyst has upgraded their earnings estimates, there was no change to the consensus price target of AU$1.73, suggesting that the forecast performance does not have a long term impact on the company's valuation.

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. One thing that stands out from these estimates is that shrinking revenues are expected to moderate over the period ending 2025 compared to the historical decline of 6.8% per annum 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 5.0% per year. So while a broad number of companies are forecast to grow, unfortunately Duxton Water is expected to see its sales affected worse than other companies in the industry.

The Bottom Line

The most important thing to take away from this upgrade is that the analyst upgraded their earnings per share estimates for this year, expecting improving business conditions. Pleasantly, the analyst also upgraded their revenue estimates, and their forecasts suggest the business is expected to grow slower than the wider market. Some investors might be disappointed to see that the price target is unchanged, but we feel that improving fundamentals are usually a positive - assuming these forecasts are met! So Duxton Water could be a good candidate for more research.

Still, the long-term prospects of the business are much more relevant than next year's earnings. We have analyst estimates for Duxton Water going out as far as 2027, and you can see them free on our platform here.

Of course, seeing company management invest large sums of money in a stock can be just as useful as knowing whether analysts are upgrading their estimates. So you may also wish to search this free list of stocks with high insider ownership.

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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.