Earnings Miss: Magellan Aerospace Corporation Missed EPS By 5.0% And Analysts Are Revising Their Forecasts

Shareholders of Magellan Aerospace Corporation (TSE:MAL) will be pleased this week, given that the stock price is up 14% to CA$15.99 following its latest quarterly results. Magellan Aerospace beat revenue expectations by 5.1%, at CA$261m. Statutory earnings per share (EPS) came in at CA$0.19, some 5.0% short of analyst estimates. 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've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.

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Taking into account the latest results, the current consensus from Magellan Aerospace's dual analysts is for revenues of CA$1.05b in 2025. This would reflect a meaningful 8.9% increase on its revenue over the past 12 months. Statutory earnings per share are predicted to leap 39% to CA$0.97. Yet prior to the latest earnings, the analysts had been anticipated revenues of CA$1.02b and earnings per share (EPS) of CA$0.90 in 2025. So there seems to have been a moderate uplift in sentiment following the latest results, given the upgrades to both revenue and earnings per share forecasts for next year.

Check out our latest analysis for Magellan Aerospace

It will come as no surprise to learn that the analysts have increased their price target for Magellan Aerospace 17% to CA$18.15on the back of these upgrades.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Magellan Aerospace's past performance and to peers in the same industry. It's clear from the latest estimates that Magellan Aerospace's rate of growth is expected to accelerate meaningfully, with the forecast 12% annualised revenue growth to the end of 2025 noticeably faster than its historical growth of 3.8% p.a. over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 9.3% per year. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect Magellan Aerospace to grow faster 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 Magellan Aerospace's earnings potential next year. Pleasantly, they also upgraded their revenue estimates, and their forecasts suggest the business is expected to grow faster than the wider industry. We note an upgrade to the price target, suggesting that the analysts believes the intrinsic value of the business is likely to improve over time.

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 analyst estimates for Magellan Aerospace going out as far as 2027, and you can see them free on our platform here.

We also provide an overview of the Magellan Aerospace Board and CEO remuneration and length of tenure at the company, and whether insiders have been buying the stock, here.

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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.