Millicom International Cellular S.A. Just Missed Earnings With A Surprise Loss - Here Are Analysts Latest Forecasts

Investors in Millicom International Cellular S.A. (NASDAQ:TIGO) had a good week, as its shares rose 2.1% to close at US$18.73 following the release of its full-year results. Things were not great overall, with a surprise (statutory) loss of US$0.48 per share on revenues of US$5.7b, even though the analysts had been expecting a profit. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

View our latest analysis for Millicom International Cellular

Taking into account the latest results, the most recent consensus for Millicom International Cellular from nine analysts is for revenues of US$5.88b in 2024. If met, it would imply a satisfactory 3.8% increase on its revenue over the past 12 months. Earnings are expected to improve, with Millicom International Cellular forecast to report a statutory profit of US$1.53 per share. In the lead-up to this report, the analysts had been modelling revenues of US$5.88b and earnings per share (EPS) of US$1.96 in 2024. The analysts seem to have become more bearish following the latest results. While there were no changes to revenue forecasts, there was a pretty serious reduction to EPS estimates.

Althoughthe analysts have revised their earnings forecasts for next year, they've also lifted the consensus price target 7.7% to US$23.06, suggesting the revised estimates are not indicative of a weaker long-term future for the business. 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 Millicom International Cellular at US$30.00 per share, while the most bearish prices it at US$18.00. There are definitely some different views on the stock, but the range of estimates is not wide enough as to imply that the situation is unforecastable, in our view.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Millicom International Cellular's past performance and to peers in the same industry. It's pretty clear that there is an expectation that Millicom International Cellular's revenue growth will slow down substantially, with revenues to the end of 2024 expected to display 3.8% growth on an annualised basis. This is compared to a historical growth rate of 8.1% over the past five years. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 3.4% annually. Factoring in the forecast slowdown in growth, it looks like Millicom International Cellular is forecast to grow at about the same rate as the wider industry.

The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Millicom International Cellular. Happily, there were no real changes to revenue forecasts, with the business still expected to grow in line with the overall industry. We note an upgrade to the price target, suggesting that the analysts believes the intrinsic value of the business is likely to improve over time.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. At Simply Wall St, we have a full range of analyst estimates for Millicom International Cellular going out to 2026, and you can see them free on our platform here..

Even so, be aware that Millicom International Cellular is showing 1 warning sign in our investment analysis , you should know about...

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.