Analysts Have Been Trimming Their Mpact Limited (JSE:MPT) Price Target After Its Latest Report

It's been a pretty great week for Mpact Limited (JSE:MPT) shareholders, with its shares surging 12% to R28.09 in the week since its latest interim results. Results were roughly in line with estimates, with revenues of R6.4b and statutory earnings per share of R0.94. 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've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.

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Following last week's earnings report, Mpact's two analysts are forecasting 2025 revenues to be R13.4b, approximately in line with the last 12 months. Statutory earnings per share are expected to dip 9.1% to R2.65 in the same period. Yet prior to the latest earnings, the analysts had been anticipated revenues of R13.3b and earnings per share (EPS) of R2.50 in 2025. So the consensus seems to have become somewhat more optimistic on Mpact's earnings potential following these results.

View our latest analysis for Mpact

The average the analysts price target fell 7.9% to R33.40, suggesting thatthe analysts have other concerns, and the improved earnings per share outlook was not enough to allay them.

Of course, another way to look at these forecasts is to place them into context against the industry itself. These estimates imply that revenue is expected to slow, with a forecast annualised decline of 0.9% by the end of 2025. This indicates a significant reduction from annual growth of 5.1% over the last five years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 5.9% annually for the foreseeable future. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Mpact is expected to lag the wider industry.

The Bottom Line

The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around Mpact's earnings potential next year. On the plus side, there were no major changes to revenue estimates; although forecasts imply they will perform worse than the wider industry. Furthermore, the analysts also cut their price targets, suggesting that the latest news has led to greater pessimism about the intrinsic value of the business.

With that in mind, we wouldn't be too quick to come to a conclusion on Mpact. Long-term earnings power is much more important than next year's profits. We have analyst estimates for Mpact going out as far as 2027, and you can see them free on our platform here.

You still need to take note of risks, for example - Mpact has 2 warning signs we think you should be aware of.

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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.