Air New Zealand Limited Just Missed Earnings - But Analysts Have Updated Their Models

As you might know, Air New Zealand Limited (NZSE:AIR) recently reported its yearly numbers. Revenues of NZ$6.8b were in line with forecasts, although statutory earnings per share (EPS) came in below expectations at NZ$0.037, missing estimates by 6.9%. 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. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

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Taking into account the latest results, the current consensus from Air New Zealand's five analysts is for revenues of NZ$6.97b in 2026. This would reflect a modest 3.3% increase on its revenue over the past 12 months. Statutory earnings per share are forecast to dive 26% to NZ$0.029 in the same period. In the lead-up to this report, the analysts had been modelling revenues of NZ$6.81b and earnings per share (EPS) of NZ$0.051 in 2026. So it's pretty clear the analysts have mixed opinions on Air New Zealand after the latest results; even though they upped their revenue numbers, it came at the cost of a large cut to per-share earnings expectations.

View our latest analysis for Air New Zealand

There's been no major changes to the price target of NZ$0.69, suggesting that the impact of higher forecast revenue and lower earnings won't result in a meaningful change to the business' valuation. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. Currently, the most bullish analyst values Air New Zealand at NZ$0.90 per share, while the most bearish prices it at NZ$0.55. There are definitely some different views on the stock, but the range of estimates is not wide enough as to imply that the situation is unforecastable, in our view.

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 pretty clear that there is an expectation that Air New Zealand's revenue growth will slow down substantially, with revenues to the end of 2026 expected to display 3.3% growth on an annualised basis. This is compared to a historical growth rate of 20% over the past five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 7.4% per year. So it's pretty clear that, while revenue growth is expected to slow down, the wider industry is also expected to grow faster than Air New Zealand.

The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Air New Zealand. They also upgraded their revenue estimates for next year, even though it is expected to grow slower than the wider industry. The consensus price target held steady at NZ$0.69, with the latest estimates not enough to have an impact on their price targets.

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 estimates - from multiple Air New Zealand analysts - going out to 2028, and you can see them free on our platform here.

Don't forget that there may still be risks. For instance, we've identified 1 warning sign for Air New Zealand 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.