Earnings Release: Here's Why Analysts Cut Their KMD Brands Limited (NZSE:KMD) Price Target To NZ$0.49

Shareholders might have noticed that KMD Brands Limited (NZSE:KMD) filed its interim result this time last week. The early response was not positive, with shares down 2.7% to NZ$0.36 in the past week. Overall the results were a little better than the analysts were expecting, with revenues beating forecasts by 3.0%to hit NZ$471m. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.

Following last week's earnings report, KMD Brands' six analysts are forecasting 2025 revenues to be NZ$997.8m, approximately in line with the last 12 months. Per-share statutory losses are expected to explode, reaching NZ$0.005 per share. Yet prior to the latest earnings, the analysts had been anticipated revenues of NZ$989.5m and earnings per share (EPS) of NZ$0.0057 in 2025. So despite reconfirming their revenue estimates, the analysts are now forecasting a loss instead of a profit, which looks like a definite drop in sentiment following the latest results.

See our latest analysis for KMD Brands

With the increase in forecast losses for next year, it's perhaps no surprise to see that the average price target dipped 6.7% to NZ$0.49, with the analysts signalling that growing losses would be a definite concern. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. Currently, the most bullish analyst values KMD Brands at NZ$0.60 per share, while the most bearish prices it at NZ$0.40. These price targets show that analysts do have some differing views on the business, but the estimates do not vary enough to suggest to us that some are betting on wild success or utter failure.

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 KMD Brands' revenue growth is expected to slow, with the forecast 3.3% annualised growth rate until the end of 2025 being well below the historical 6.4% p.a. growth over the last five years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 5.0% annually. Factoring in the forecast slowdown in growth, it seems obvious that KMD Brands is also expected to grow slower than other industry participants.

The Bottom Line

The biggest low-light for us was that the forecasts for KMD Brands dropped from profits to a loss next year. On the plus side, there were no major changes to revenue estimates; although forecasts imply they will perform worse than the wider industry. The consensus price target fell measurably, with the analysts seemingly not reassured by the latest results, leading to a lower estimate of KMD Brands' future valuation.

With that in mind, we wouldn't be too quick to come to a conclusion on KMD Brands. Long-term earnings power is much more important than next year's profits. At Simply Wall St, we have a full range of analyst estimates for KMD Brands going out to 2027, and you can see them free on our platform here..

It might also be worth considering whether KMD Brands' debt load is appropriate, using our debt analysis tools on the Simply Wall St platform, here.

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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.