Manulife Financial Corporation (TSE:MFC) Analysts Just Trimmed Their Revenue Forecasts By 13%

The analysts covering Manulife Financial Corporation (TSE:MFC) delivered a dose of negativity to shareholders today, by making a substantial revision to their statutory forecasts for this year. Revenue estimates were cut sharply as the analysts signalled a weaker outlook - perhaps a sign that investors should temper their expectations as well.

After the downgrade, the eleven analysts covering Manulife Financial are now predicting revenues of CA$58b in 2023. If met, this would reflect a substantial 156% improvement in sales compared to the last 12 months. Statutory earnings per share are supposed to plummet 58% to CA$2.92 in the same period. Previously, the analysts had been modelling revenues of CA$67b and earnings per share (EPS) of CA$2.92 in 2023. Indeed we can see that the consensus opinion has undergone some fundamental changes following the recent consensus updates, with a measurable cut to revenues and some minor tweaks to earnings numbers.

View our latest analysis for Manulife Financial

The average price target was steady at CA$29.01 even though revenue estimates declined; likely suggesting the analysts place a higher value on earnings.

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. For example, we noticed that Manulife Financial's rate of growth is expected to accelerate meaningfully, with revenues forecast to exhibit 6x growth to the end of 2023 on an annualised basis. That is well above its historical decline of 11% 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 10% 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 most obvious conclusion from this consensus update is that there's been no major change in the business' prospects in recent times, with analysts holding earnings per share steady, in line with previous estimates. While analysts did downgrade their revenue estimates, these forecasts still imply revenues will perform better than the wider market. Overall, given the drastic downgrade to this year's forecasts, we'd be feeling a little more wary of Manulife Financial going forwards.

Still, 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 Manulife Financial going out to 2025, and you can see them free on our platform here.

Another way to search for interesting companies that could be reaching an inflection point is to track whether management are buying or selling, with our free list of growing companies that insiders are buying.

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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.