Earnings Release: Here's Why Analysts Cut Their Metro Performance Glass Limited (NZSE:MPG) Price Target To NZ$0.44

Metro Performance Glass Limited (NZSE:MPG) shareholders are probably feeling a little disappointed, since its shares fell 7.3% to NZ$0.26 in the week after its latest yearly results. Earnings are an important time for investors, as they can track a company's performance, look at what the analyst is 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 analyst has changed their mind on Metro Performance Glass after the latest results.

See our latest analysis for Metro Performance Glass

Taking into account the latest results, the consensus forecast from Metro Performance Glass' lone analyst is for revenues of NZ$263.0m in 2023, which would reflect a meaningful 11% improvement in sales compared to the last 12 months. Metro Performance Glass is also expected to turn profitable, with statutory earnings of NZ$0.02 per share. In the lead-up to this report, the analyst had been modelling revenues of NZ$253.0m and break-even in 2023. So it seems there's been a definite increase in optimism about Metro Performance Glass' future following the latest results, with a the earnings per share forecasts in particular.

As a result, it might be a surprise to see thatthe analyst has cut their price target 6.4% to NZ$0.44, which could suggest the forecast improvement in performance is not expected to last.

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. One thing stands out from these estimates, which is that Metro Performance Glass is forecast to grow faster in the future than it has in the past, with revenues expected to display 11% annualised growth until the end of 2023. If achieved, this would be a much better result than the 3.0% annual decline 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 6.7% per year. So it looks like Metro Performance Glass is expected to grow faster than its competitors, at least for a while.

The Bottom Line

The most important thing here is that the analyst upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards Metro Performance Glass 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. Furthermore, the analyst also cut their price targets, suggesting that the latest news has led to greater pessimism about the intrinsic value of the business.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have analyst estimates for Metro Performance Glass going out as far as 2025, and you can see them free on our platform here.

Don't forget that there may still be risks. For instance, we've identified 2 warning signs for Metro Performance Glass that you should be aware of.

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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.