MDU Resources Group, Inc. (NYSE:MDU) Analysts Just Slashed This Year's Estimates

One thing we could say about the analysts on MDU Resources Group, Inc. (NYSE:MDU) - they aren't optimistic, having just made a major negative revision to their near-term (statutory) forecasts for the organization. Both revenue and earnings per share (EPS) estimates were cut sharply as analysts factored in the latest outlook for the business, concluding that they were too optimistic previously.

Following the downgrade, the consensus from three analysts covering MDU Resources Group is for revenues of US$4.9b in 2023, implying a substantial 32% decline in sales compared to the last 12 months. Statutory earnings per share are anticipated to tumble 27% to US$1.34 in the same period. Previously, the analysts had been modelling revenues of US$7.3b and earnings per share (EPS) of US$2.12 in 2023. Indeed, we can see that the analysts are a lot more bearish about MDU Resources Group's prospects, administering a sizeable cut to revenue estimates and slashing their EPS estimates to boot.

View our latest analysis for MDU Resources Group

It'll come as no surprise then, to learn that the analysts have cut their price target 16% to US$28.25. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. Currently, the most bullish analyst values MDU Resources Group at US$36.00 per share, while the most bearish prices it at US$22.00. This shows there is still some diversity in estimates, but analysts don't appear to be totally split on the stock as though it might be a success or failure situation.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the MDU Resources Group's past performance and to peers in the same industry. We would highlight that sales are expected to reverse, with a forecast 41% annualised revenue decline to the end of 2023. That is a notable change from historical growth of 8.8% over the last five years. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 7.7% per year. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - MDU Resources Group is expected to lag the wider industry.

The Bottom Line

The biggest issue in the new estimates is that analysts have reduced their earnings per share estimates, suggesting business headwinds lay ahead for MDU Resources Group. Unfortunately analysts also downgraded their revenue estimates, and industry data suggests that MDU Resources Group's revenues are expected to grow slower than the wider market. After such a stark change in sentiment from analysts, we'd understand if readers now felt a bit wary of MDU Resources Group.

Still, the long-term prospects of the business are much more relevant than next year's earnings. We have estimates - from multiple MDU Resources Group analysts - going out to 2025, and you can see them free on our platform here.

Of course, seeing company management invest large sums of money in a stock can be just as useful as knowing whether analysts are downgrading their estimates. So you may also wish to search this free list of stocks that insiders are buying.

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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.