Earnings Update: Metro Inc. (TSE:MRU) Just Reported Its Third-Quarter Results And Analysts Are Updating Their Forecasts

Investors in Metro Inc. (TSE:MRU) had a good week, as its shares rose 5.2% to close at CA$83.91 following the release of its third-quarter results. Metro reported in line with analyst predictions, delivering revenues of CA$6.7b and statutory earnings per share of CA$1.31, suggesting the business is executing well and in line with its plan. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.

View our latest analysis for Metro

Taking into account the latest results, the consensus forecast from Metro's seven analysts is for revenues of CA$21.9b in 2025. This reflects a satisfactory 2.3% improvement in revenue compared to the last 12 months. Per-share earnings are expected to expand 13% to CA$4.70. Before this earnings report, the analysts had been forecasting revenues of CA$21.8b and earnings per share (EPS) of CA$4.70 in 2025. So it's pretty clear that, although the analysts have updated their estimates, there's been no major change in expectations for the business following the latest results.

There were no changes to revenue or earnings estimates or the price target of CA$83.33, suggesting that the company has met expectations in its recent result. 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. There are some variant perceptions on Metro, with the most bullish analyst valuing it at CA$92.00 and the most bearish at CA$70.00 per share. Still, with such a tight range of estimates, it suggeststhe analysts have a pretty good idea of what they think the company is worth.

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. It's pretty clear that there is an expectation that Metro's revenue growth will slow down substantially, with revenues to the end of 2025 expected to display 1.9% growth on an annualised basis. This is compared to a historical growth rate of 4.8% over the past five years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 3.4% annually. So it's pretty clear that, while revenue growth is expected to slow down, the wider industry is also expected to grow faster than Metro.

The Bottom Line

The most obvious conclusion is that there's been no major change in the business' prospects in recent times, with the analysts holding their earnings forecasts steady, in line with previous estimates. On the plus side, there were no major changes to revenue estimates; although forecasts imply they will perform worse than the wider industry. The consensus price target held steady at CA$83.33, with the latest estimates not enough to have an impact on their price targets.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. At Simply Wall St, we have a full range of analyst estimates for Metro going out to 2026, and you can see them free on our platform here..

Even so, be aware that Metro is showing 1 warning sign in our investment analysis , you should know about...

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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.