New Forecasts: Here's What Analysts Think The Future Holds For Freightways Limited (NZSE:FRE)

Shareholders in Freightways Limited (NZSE:FRE) may be thrilled to learn that the analysts have just delivered a major upgrade to their near-term forecasts. The analysts have sharply increased their revenue numbers, with a view that Freightways will make substantially more sales than they'd previously expected.

After the upgrade, the four analysts covering Freightways are now predicting revenues of NZ$1.1b in 2023. If met, this would reflect a huge 23% improvement in sales compared to the last 12 months. Prior to the latest estimates, the analysts were forecasting revenues of NZ$930m in 2023. The consensus has definitely become more optimistic, showing a nice increase in revenue forecasts.

See our latest analysis for Freightways

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. The analysts are definitely expecting Freightways' growth to accelerate, with the forecast 23% annualised growth to the end of 2023 ranking favourably alongside historical growth of 9.8% per annum over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 4.6% per year. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect Freightways to grow faster than the wider industry.

The Bottom Line

The most important thing to take away from this upgrade is that analysts lifted their revenue estimates for this year. The analysts also expect revenues to grow faster than the wider market. Given that analysts appear to be expecting substantial improvement in the sales pipeline, now could be the right time to take another look at Freightways.

Using these estimates as a starting point, we've run a discounted cash flow calculation (DCF) on Freightways that suggests the company could be somewhat undervalued. You can learn more about our valuation methodology on our platform here.

Another thing to consider is whether management and directors have been buying or selling stock recently. We provide an overview of all open market stock trades for the last twelve months on our 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.