Analyst Forecasts Just Became More Bearish On Manulife Financial Corporation (TSE:MFC)

The latest analyst coverage could presage a bad day for Manulife Financial Corporation (TSE:MFC), with the analysts making across-the-board cuts to their statutory estimates that might leave shareholders a little shell-shocked. There was a fairly draconian cut to their revenue estimates, perhaps an implicit admission that previous forecasts were much too optimistic.

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After the downgrade, the ten analysts covering Manulife Financial are now predicting revenues of CA$47b in 2025. If met, this would reflect a major 50% improvement in sales compared to the last 12 months. Prior to the latest estimates, the analysts were forecasting revenues of CA$54b in 2025. The consensus view seems to have become more pessimistic on Manulife Financial, noting the measurable cut to revenue estimates in this update.

See our latest analysis for Manulife Financial

There was no particular change to the consensus price target of CA$47.21, with Manulife Financial's latest outlook seemingly not enough to result in a change of 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. For example, we noticed that Manulife Financial's rate of growth is expected to accelerate meaningfully, with revenues forecast to exhibit 125% growth to the end of 2025 on an annualised basis. That is well above its historical decline of 24% a year over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in the industry are forecast to see their revenue grow 5.4% per year. So it looks like Manulife Financial is expected to grow faster than its competitors, at least for a while.

The Bottom Line

The clear low-light was that analysts slashing their revenue forecasts for Manulife Financial this year. They're also forecasting more rapid revenue growth than the wider market. Often, one downgrade can set off a daisy-chain of cuts, especially if an industry is in decline. So we wouldn't be surprised if the market became a lot more cautious on Manulife Financial after today.

Looking to learn more? At least one of Manulife Financial's ten analysts has provided estimates out to 2027, which can be seen for 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 downgrading 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.