Earnings Release: Here's Why Analysts Cut Their Napier Port Holdings Limited (NZSE:NPH) Price Target To NZ$3.48

Last week, you might have seen that Napier Port Holdings Limited (NZSE:NPH) released its annual result to the market. The early response was not positive, with shares down 3.0% to NZ$3.58 in the past week. Results were roughly in line with estimates, with revenues of NZ$100m and statutory earnings per share of NZ$0.11. 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've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.

View our latest analysis for Napier Port Holdings

Taking into account the latest results, the current consensus from Napier Port Holdings' two analysts is for revenues of NZ$102.5m in 2021, which would reflect a modest 2.1% increase on its sales over the past 12 months. Statutory earnings per share are forecast to descend 14% to NZ$0.095 in the same period. Yet prior to the latest earnings, the analysts had been anticipated revenues of NZ$102.1m and earnings per share (EPS) of NZ$0.10 in 2021. The analysts seem to have become a little more negative on the business after the latest results, given the minor downgrade to their earnings per share numbers for next year.

The average price target fell 5.3% to NZ$3.48, with reduced earnings forecasts clearly tied to a lower valuation estimate.

Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. We would highlight that Napier Port Holdings' revenue growth is expected to slow, with forecast 2.1% increase next year well below the historical 7.6%p.a. growth over the last five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 6.8% per year. Factoring in the forecast slowdown in growth, it seems obvious that Napier Port Holdings is also expected to grow slower than other industry participants.

The Bottom Line

The most important thing to take away is that the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting sales are tracking in line with expectations - although our data does suggest that Napier Port Holdings' revenues are expected to perform worse than the wider industry. Furthermore, the analysts also cut their price targets, suggesting that the latest news has led to greater pessimism about the intrinsic value of the business.

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 analyst estimates for Napier Port Holdings going out as far as 2023, and you can see them free 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. 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.
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