Winton Land Limited's (NZSE:WIN) Analyst Just Slashed This Year's Estimates

Today is shaping up negative for Winton Land Limited (NZSE:WIN) shareholders, with the covering analyst delivering a substantial negative revision to this year's forecasts. Both revenue and earnings per share (EPS) estimates were cut sharply as the analyst factored in the latest outlook for the business, concluding that they were too optimistic previously.

After the downgrade, the solitary analyst covering Winton Land is now predicting revenues of NZ$252m in 2023. If met, this would reflect a major 26% improvement in sales compared to the last 12 months. Per-share earnings are expected to shoot up 20% to NZ$0.26. Previously, the analyst had been modelling revenues of NZ$346m and earnings per share (EPS) of NZ$0.34 in 2023. It looks like analyst sentiment has declined substantially, with a pretty serious reduction to revenue estimates and a large cut to earnings per share numbers as well.

View our latest analysis for Winton Land

The consensus price target fell 6.4% to NZ$2.85, with the weaker earnings outlook clearly leading analyst valuation estimates.

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. We would highlight that Winton Land's revenue growth is expected to slow, with the forecast 26% annualised growth rate until the end of 2023 being well below the historical 37% p.a. growth over the last three years. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 9.4% per year. So it's pretty clear that, while Winton Land's revenue growth is expected to slow, it's still expected to grow faster than the industry itself.

The Bottom Line

The biggest issue in the new estimates is that the analyst has reduced their earnings per share estimates, suggesting business headwinds lay ahead for Winton Land. Unfortunately, the analyst also downgraded their revenue estimates, although our data indicates revenues are expected to perform better than the wider market. After such a stark change in sentiment from the analyst, we'd understand if readers now felt a bit wary of Winton Land.

After a downgrade like this, it's pretty clear that previous forecasts were too optimistic. What's more, we've spotted several possible issues with Winton Land's business, like concerns around earnings quality. Learn more, and discover the 1 other concern we've identified, for 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.