Ag Growth International Inc. (TSE:AFN) Analysts Are Cutting Their Estimates: Here's What You Need To Know

Ag Growth International Inc. (TSE:AFN) last week reported its latest yearly results, which makes it a good time for investors to dive in and see if the business is performing in line with expectations. It was an okay report, and revenues came in at CA$1.4b, approximately in line with analyst estimates leading up to the results announcement. 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 Ag Growth International after the latest results.

View our latest analysis for Ag Growth International

Taking into account the latest results, the eight analysts covering Ag Growth International provided consensus estimates of CA$1.32b revenue in 2025, which would reflect a noticeable 5.7% decline over the past 12 months. Earnings are expected to improve, with Ag Growth International forecast to report a statutory profit of CA$1.72 per share. In the lead-up to this report, the analysts had been modelling revenues of CA$1.42b and earnings per share (EPS) of CA$2.79 in 2025. The analysts seem less optimistic after the recent results, reducing their revenue forecasts and making a large cut to earnings per share numbers.

The consensus price target fell 12% to CA$49.00, with the weaker earnings outlook clearly leading valuation estimates. 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. The most optimistic Ag Growth International analyst has a price target of CA$65.00 per share, while the most pessimistic values it at CA$40.00. 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.

Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. These estimates imply that revenue is expected to slow, with a forecast annualised decline of 5.7% by the end of 2025. This indicates a significant reduction from annual growth of 9.9% over the last five years. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 8.7% per year. It's pretty clear that Ag Growth International's revenues are expected to perform substantially worse than the wider industry.

The Bottom Line

The most important thing to take away is that the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. Unfortunately, they also downgraded their revenue estimates, and our data indicates underperformance compared to the wider industry. Even so, earnings per share are more important to the intrinsic value of the business. The consensus price target fell measurably, with the analysts seemingly not reassured by the latest results, leading to a lower estimate of Ag Growth International's future valuation.

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. At Simply Wall St, we have a full range of analyst estimates for Ag Growth International going out to 2027, 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 1 warning sign for Ag Growth International 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.