MPC Container Ships ASA Just Missed Earnings - But Analysts Have Updated Their Models

MPC Container Ships ASA (OB:MPCC) missed earnings with its latest quarterly results, disappointing overly-optimistic forecasters. It wasn't a great result overall - while revenue fell marginally short of analyst estimates at US$55m, statutory earnings missed forecasts by an incredible 42%, coming in at just US$0.01 per share. 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.

See our latest analysis for MPC Container Ships

Taking into account the latest results, the current consensus from MPC Container Ships' three analysts is for revenues of US$279.0m in 2021, which would reflect a huge 54% increase on its sales over the past 12 months. MPC Container Ships is also expected to turn profitable, with statutory earnings of US$0.19 per share. Before this earnings report, the analysts had been forecasting revenues of US$269.7m and earnings per share (EPS) of US$0.18 in 2021. 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.

With these upgrades, we're not surprised to see that the analysts have lifted their price target 20% to US$1.91per share. 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. There are some variant perceptions on MPC Container Ships, with the most bullish analyst valuing it at US$18.16 and the most bearish at US$13.11 per share. We would probably assign less value to the analyst forecasts in this situation, because such a wide range of estimates could imply that the future of this business is difficult to value accurately. With this in mind, we wouldn't rely too heavily the consensus price target, as it is just an average and analysts clearly have some deeply divergent views on the business.

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. It's clear from the latest estimates that MPC Container Ships' rate of growth is expected to accelerate meaningfully, with the forecast 78% annualised revenue growth to the end of 2021 noticeably faster than its historical growth of 16% p.a. over the past three years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 11% per year. Factoring in the forecast acceleration in revenue, it's pretty clear that MPC Container Ships is expected to grow much faster than its 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 MPC Container Ships following these results. Pleasantly, they also upgraded their revenue estimates, and their forecasts suggest the business is expected to grow faster than the wider industry. There was also a nice increase in the price target, with the analysts clearly feeling that the intrinsic value of the business is improving.

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 MPC Container Ships going out to 2023, and you can see them free on our platform here.

However, before you get too enthused, we've discovered 2 warning signs for MPC Container Ships (1 makes us a bit uncomfortable!) that you should be aware of.

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This article by Simply Wall St is general in nature. 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.
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