New Forecasts: Here's What Analysts Think The Future Holds For Manawa Energy Limited (NZSE:MNW)

Shareholders in Manawa Energy Limited (NZSE:MNW) may be thrilled to learn that the analysts have just delivered a major upgrade to their near-term forecasts. The consensus estimated revenue numbers rose, with their view now clearly much more bullish on the company's business prospects.

After the upgrade, the consensus from Manawa Energy's five analysts is for revenues of NZ$575m in 2023, which would reflect a painful 42% decline in sales compared to the last year of performance. Statutory earnings per share are supposed to dive 34% to NZ$0.24 in the same period. Before this latest update, the analysts had been forecasting revenues of NZ$439m and earnings per share (EPS) of NZ$0.24 in 2023. The most recent forecasts are noticeably more optimistic, with a great increase in revenue estimates and a lift to earnings per share as well.

Check out our latest analysis for Manawa Energy

Despite these upgrades, the analysts have not made any major changes to their price target of NZ$6.80, suggesting that the higher estimates are not likely to have a long term impact on what the stock is worth. 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 Manawa Energy at NZ$9.13 per share, while the most bearish prices it at NZ$5.20. Analysts definitely have varying views on the business, but the spread of estimates is not wide enough in our view to suggest that extreme outcomes could await Manawa Energy shareholders.

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. We would highlight that sales are expected to reverse, with a forecast 42% annualised revenue decline to the end of 2023. That is a notable change from historical growth of 0.05% over the last five years. By contrast, our data suggests that other companies (with analyst coverage) in the industry are forecast to see their revenue decline 8.0% annually for the foreseeable future. So it's pretty clear that Manawa Energy's revenues are expected to shrink faster than the wider industry.

The Bottom Line

The most important thing to take away from this upgrade is that analysts upgraded their earnings per share estimates for this year, expecting improving business conditions. Notably, analysts also upgraded their revenue estimates, with sales performing well although Manawa Energy's revenue growth is expected to trail that of the wider market. Seeing the dramatic upgrade to this year's forecasts, it might be time to take another look at Manawa Energy.

These earnings upgrades look like a sterling endorsement, but before diving in - you should know that we've spotted 3 potential warning signs with Manawa Energy, including a weak balance sheet. For more information, you can click through to our platform to learn more about this and the 2 other warning signs we've identified .

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.