Stock Analysis

Analysts Just Made A Major Revision To Their Momentum Metropolitan Holdings Limited (JSE:MTM) Revenue Forecasts

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The latest analyst coverage could presage a bad day for Momentum Metropolitan Holdings Limited (JSE:MTM), with the analysts making across-the-board cuts to their statutory estimates that might leave shareholders a little shell-shocked. Revenue estimates were cut sharply as analysts signalled a weaker outlook - perhaps a sign that investors should temper their expectations as well.

Following the latest downgrade, the three analysts covering Momentum Metropolitan Holdings provided consensus estimates of R66b revenue in 2024, which would reflect a disturbing 49% decline on its sales over the past 12 months. Before the latest update, the analysts were foreseeing R74b of revenue in 2024. The consensus view seems to have become more pessimistic on Momentum Metropolitan Holdings, noting the measurable cut to revenue estimates in this update.

Check out our latest analysis for Momentum Metropolitan Holdings

JSE:MTM Earnings and Revenue Growth May 23rd 2024

There was no particular change to the consensus price target of R23.96, with Momentum Metropolitan Holdings' latest outlook seemingly not enough to result in a change of valuation.

One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. We would highlight that sales are expected to reverse, with a forecast 49% annualised revenue decline to the end of 2024. That is a notable change from historical growth of 11% over the last five years. By contrast, our data suggests that other companies (with analyst coverage) in the industry are forecast to see their revenue decline 42% annually for the foreseeable future.

The Bottom Line

The most important thing to take away is that analysts cut their revenue estimates for this year. They're also forecasting for revenues to decline at about the same rate as companies in the wider market. Given the stark change in sentiment, we'd understand if investors became more cautious on Momentum Metropolitan Holdings after today.

Uncomfortably, our automated valuation tool also suggests that Momentum Metropolitan Holdings stock could be overvalued following the downgrade. Shareholders could be left disappointed if these estimates play out. Learn why, and examine the assumptions that underpin our valuation by visiting our free platform here to learn more about our valuation approach.

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Find out whether Momentum Metropolitan Holdings is potentially over or undervalued by checking out our comprehensive analysis, which includes fair value estimates, risks and warnings, dividends, insider transactions and financial health.

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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.