NZ$9.19 - That's What Analysts Think Freightways Group Limited (NZSE:FRW) Is Worth After These Results

As you might know, Freightways Group Limited (NZSE:FRW) recently reported its interim numbers. Results overall were respectable, with statutory earnings of NZ$0.43 per share roughly in line with what the analysts had forecast. Revenues of NZ$621m came in 4.0% ahead of analyst predictions. 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. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.

See our latest analysis for Freightways Group

Taking into account the latest results, Freightways Group's four analysts currently expect revenues in 2024 to be NZ$1.20b, approximately in line with the last 12 months. Statutory per share are forecast to be NZ$0.40, approximately in line with the last 12 months. Before this earnings report, the analysts had been forecasting revenues of NZ$1.20b and earnings per share (EPS) of NZ$0.39 in 2024. So the consensus seems to have become somewhat more optimistic on Freightways Group's earnings potential following these results.

The analysts have been lifting their price targets on the back of the earnings upgrade, with the consensus price target rising 6.5% to NZ$9.19. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. The most optimistic Freightways Group analyst has a price target of NZ$9.55 per share, while the most pessimistic values it at NZ$8.83. With such a narrow range of valuations, the analysts apparently share similar views on what they think the business is worth.

Of course, another way to look at these forecasts is to place them into context against the industry itself. It's pretty clear that there is an expectation that Freightways Group's revenue growth will slow down substantially, with revenues to the end of 2024 expected to display 2.2% growth on an annualised basis. This is compared to a historical growth rate of 15% over the past 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. So it's pretty clear that, while revenue growth is expected to slow down, the wider industry is also expected to grow faster than Freightways Group.

The Bottom Line

The most important thing here is that the analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards Freightways Group following these results. On the plus side, there were no major changes to revenue estimates; although forecasts imply they will perform worse than the wider industry. There was also a nice increase in the price target, with the analysts clearly feeling that the intrinsic value of the business is improving.

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 forecasts for Freightways Group going out to 2026, and you can see them free on our platform here.

We don't want to rain on the parade too much, but we did also find 2 warning signs for Freightways Group that you need to be mindful 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.