Morgan Advanced Materials plc (LON:MGAM) Half-Yearly Results: Here's What Analysts Are Forecasting For This Year

There's been a notable change in appetite for Morgan Advanced Materials plc (LON:MGAM) shares in the week since its interim report, with the stock down 11% to UK£1.99. It was a credible result overall, with revenues of UK£523m and statutory earnings per share of UK£0.17 both in line with analyst estimates, showing that Morgan Advanced Materials is executing in line with expectations. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Morgan Advanced Materials after the latest results.

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Taking into account the latest results, the current consensus, from the seven analysts covering Morgan Advanced Materials, is for revenues of UK£1.03b in 2025. This implies a noticeable 2.3% reduction in Morgan Advanced Materials' revenue over the past 12 months. Statutory earnings per share are predicted to shoot up 81% to UK£0.18. In the lead-up to this report, the analysts had been modelling revenues of UK£1.02b and earnings per share (EPS) of UK£0.17 in 2025. So the consensus seems to have become somewhat more optimistic on Morgan Advanced Materials' earnings potential following these results.

View our latest analysis for Morgan Advanced Materials

There's been no major changes to the consensus price target of UK£2.59, suggesting that the improved earnings per share outlook is not enough to have a long-term positive impact on the stock's valuation. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. The most optimistic Morgan Advanced Materials analyst has a price target of UK£3.15 per share, while the most pessimistic values it at UK£2.10. Analysts definitely have varying views on the business, but the spread of estimates is not wide enough in our view to suggest that extreme outcomes could await Morgan Advanced Materials shareholders.

One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. We would highlight that revenue is expected to reverse, with a forecast 4.6% annualised decline to the end of 2025. That is a notable change from historical growth of 4.0% over the last five years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 4.8% annually for the foreseeable future. It's pretty clear that Morgan Advanced Materials' revenues are expected to perform substantially worse than the wider industry.

The Bottom Line

The most important thing here is that the analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards Morgan Advanced Materials following these results. On the plus side, there were no major changes to revenue estimates; although forecasts imply they will perform worse than the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.

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. We have forecasts for Morgan Advanced Materials going out to 2027, and you can see them free on our platform here.

Even so, be aware that Morgan Advanced Materials is showing 4 warning signs in our investment analysis , and 1 of those shouldn't be ignored...

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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.