Some Analysts Just Cut Their Macquarie Infrastructure Corporation (NYSE:MIC) Estimates

One thing we could say about the analysts on Macquarie Infrastructure Corporation (NYSE:MIC) - they aren't optimistic, having just made a major negative revision to their near-term (statutory) forecasts for the organization. There was a fairly draconian cut to their revenue estimates, perhaps an implicit admission that previous forecasts were much too optimistic.

After the downgrade, the consensus from Macquarie Infrastructure's two analysts is for revenues of US$1.0b in 2021, which would reflect a disturbing 31% decline in sales compared to the last year of performance. Prior to the latest estimates, the analysts were forecasting revenues of US$1.3b in 2021. It looks like forecasts have become a fair bit less optimistic on Macquarie Infrastructure, given the pretty serious reduction to revenue estimates.

Check out our latest analysis for Macquarie Infrastructure

The consensus price target rose 20% to US$42.75, with the analysts clearly more optimistic about Macquarie Infrastructure's prospects following this update. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. Currently, the most bullish analyst values Macquarie Infrastructure at US$50.00 per share, while the most bearish prices it at US$34.00. 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 Macquarie Infrastructure shareholders.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Macquarie Infrastructure's past performance and to peers in the same industry. Over the past five years, revenues have declined around 1.1% annually. Worse, forecasts are essentially predicting the decline to accelerate, with the estimate for a 31% decline in revenue next year. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenue grow 15% per year. So while a broad number of companies are forecast to grow, unfortunately Macquarie Infrastructure is expected to see its sales affected worse than other companies in the industry.

The Bottom Line

The most important thing to take away is that analysts cut their revenue estimates for next year. They also expect company revenue to perform worse than the wider market. There was also a nice increase in the price target, with analysts apparently feeling that the intrinsic value of the business is improving. Overall, given the drastic downgrade to next year's forecasts, we'd be feeling a little more wary of Macquarie Infrastructure going forwards.

Thirsting for more data? At least one of Macquarie Infrastructure's two analysts has provided estimates out to 2022, which can be seen for 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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