Mativ Holdings, Inc. (NYSE:MATV) Analysts Just Slashed This Year's Estimates

The latest analyst coverage could presage a bad day for Mativ Holdings, Inc. (NYSE:MATV), with the analysts making across-the-board cuts to their statutory estimates that might leave shareholders a little shell-shocked. 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 latest downgrade, the two analysts covering Mativ Holdings provided consensus estimates of US$2.4b revenue in 2023, which would reflect an uncomfortable 9.1% decline on its sales over the past 12 months. The loss per share is anticipated to greatly reduce in the near future, narrowing 28% to US$0.43. Before this latest update, the analysts had been forecasting revenues of US$2.7b and earnings per share (EPS) of US$0.27 in 2023. So we can see that the consensus has become notably more bearish on Mativ Holdings' outlook with these numbers, making a substantial drop in this year's revenue estimates. Furthermore, they expect the business to be loss-making this year, compared to their previous forecasts of a profit.

View our latest analysis for Mativ Holdings

The consensus price target was broadly unchanged at US$28.50, perhaps implicitly signalling that the weaker earnings outlook is not expected to have a long-term impact on the valuation.

Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. We would highlight that sales are expected to reverse, with a forecast 17% annualised revenue decline to the end of 2023. That is a notable change from historical growth of 20% 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 4.2% per year. It's pretty clear that Mativ Holdings' revenues are expected to perform substantially worse than the wider industry.

The Bottom Line

The biggest low-light for us was that the forecasts for Mativ Holdings dropped from profits to a loss this year. Regrettably, they also downgraded their revenue estimates, and the latest forecasts imply the business will grow sales slower than the wider market. We're also surprised to see that the price target went unchanged. Still, deteriorating business conditions (assuming accurate forecasts!) can be a leading indicator for the stock price, so we wouldn't blame investors for being more cautious on Mativ Holdings after the downgrade.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have analyst estimates for Mativ Holdings going out as far as 2024, and you can see them free on our platform here.

Another way to search for interesting companies that could be reaching an inflection point is to track whether management are buying or selling, with our free list of growing companies 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.