Northwest Natural Holding Company (NYSE:NWN) Released Earnings Last Week And Analysts Lifted Their Price Target To US$45.00

Northwest Natural Holding Company (NYSE:NWN) shareholders are probably feeling a little disappointed, since its shares fell 5.8% to US$38.39 in the week after its latest quarterly results. Results look to have been somewhat negative - revenue fell 8.7% short of analyst estimates at US$212m, although statutory losses were somewhat better. The per-share loss was US$0.07, 45% smaller than the analysts were expecting prior to the result. 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. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Northwest Natural Holding after the latest results.

View our latest analysis for Northwest Natural Holding

Following the latest results, Northwest Natural Holding's six analysts are now forecasting revenues of US$1.19b in 2024. This would be a satisfactory 4.0% improvement in revenue compared to the last 12 months. Per-share earnings are expected to accumulate 9.0% to US$2.31. Before this earnings report, the analysts had been forecasting revenues of US$1.20b and earnings per share (EPS) of US$2.29 in 2024. So it's pretty clear that, although the analysts have updated their estimates, there's been no major change in expectations for the business following the latest results.

The consensus price target rose 5.1% to US$45.00despite there being no meaningful change to earnings estimates. It could be that the analystsare reflecting the predictability of Northwest Natural Holding's earnings by assigning a price premium. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. There are some variant perceptions on Northwest Natural Holding, with the most bullish analyst valuing it at US$61.00 and the most bearish at US$38.00 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 Northwest Natural Holding shareholders.

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. It's pretty clear that there is an expectation that Northwest Natural Holding's revenue growth will slow down substantially, with revenues to the end of 2024 expected to display 8.1% growth on an annualised basis. This is compared to a historical growth rate of 12% 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) 7.6% annually. So it's pretty clear that, while Northwest Natural Holding's revenue growth is expected to slow, it's expected to grow roughly in line with the industry.

The Bottom Line

The most important thing to take away is that there's been no major change in sentiment, with the analysts reconfirming that the business is performing in line with their previous earnings per share estimates. They also reconfirmed their revenue estimates, with the company predicted to grow at about the same rate as the wider 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.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have forecasts for Northwest Natural Holding going out to 2026, and you can see them free on our platform here.

It is also worth noting that we have found 3 warning signs for Northwest Natural Holding (1 is a bit concerning!) that you need to take into consideration.

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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.

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