It's been a sad week for Maxar Technologies Inc. (NYSE:MAXR), who've watched their investment drop 12% to US$24.50 in the week since the company reported its annual result. It was overall a positive result, with revenues beating expectations by 5.5% to hit US$1.8b. Maxar Technologies also reported a statutory profit of US$0.63, which was a nice improvement from the loss that the analysts were predicting. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.
After the latest results, the ten analysts covering Maxar Technologies are now predicting revenues of US$1.83b in 2022. If met, this would reflect a satisfactory 3.3% improvement in sales compared to the last 12 months. Statutory earnings per share are expected to drop 18% to US$0.52 in the same period. In the lead-up to this report, the analysts had been modelling revenues of US$1.87b and earnings per share (EPS) of US$0.84 in 2022. From this we can that sentiment has definitely become more bearish after the latest results, leading to lower revenue forecasts and a large cut to earnings per share estimates.
Despite the cuts to forecast earnings, there was no real change to the US$41.00 price target, showing that the analysts don't think the changes have a meaningful impact on its intrinsic value. 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. There are some variant perceptions on Maxar Technologies, with the most bullish analyst valuing it at US$52.00 and the most bearish at US$32.00 per share. 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 Maxar Technologies shareholders.
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. The analysts are definitely expecting Maxar Technologies' growth to accelerate, with the forecast 3.3% annualised growth to the end of 2022 ranking favourably alongside historical growth of 2.3% per annum over the past five years. Compare this with other companies in the same industry, which are forecast to see revenue growth of 6.3% annually. It seems obvious that, while the future growth outlook is brighter than the recent past, Maxar Technologies is expected to grow slower than the wider industry.
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. On the negative side, they also downgraded their revenue estimates, and forecasts imply revenues will perform worse than the wider industry. The consensus price target held steady at US$41.00, with the latest estimates not enough to have an impact on their price targets.
Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. At Simply Wall St, we have a full range of analyst estimates for Maxar Technologies going out to 2024, and you can see them free on our platform here..
Plus, you should also learn about the 3 warning signs we've spotted with Maxar Technologies (including 1 which is significant) .
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.