The Freightways Group Limited (NZSE:FRW) Yearly Results Are Out And Analysts Have Published New Forecasts
Last week, you might have seen that Freightways Group Limited (NZSE:FRW) released its yearly result to the market. The early response was not positive, with shares down 2.1% to NZ$13.53 in the past week. It was a credible result overall, with revenues of NZ$1.5b and statutory earnings per share of NZ$0.52 both in line with analyst estimates, showing that Freightways Group is executing in line with expectations. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Freightways Group after the latest results.
After the latest results, the five analysts covering Freightways Group are now predicting revenues of NZ$1.60b in 2027. If met, this would reflect a solid 9.4% improvement in revenue compared to the last 12 months. Per-share earnings are expected to ascend 16% to NZ$0.61. Before this earnings report, the analysts had been forecasting revenues of NZ$1.58b and earnings per share (EPS) of NZ$0.64 in 2027. So it looks like there's been a small decline in overall sentiment after the recent results - there's been no major change to revenue estimates, but the analysts did make a small dip in their earnings per share forecasts.
See our latest analysis for Freightways Group
It might be a surprise to learn that the consensus price target was broadly unchanged at NZ$15.10, with the analysts clearly implying that the forecast decline in earnings is not expected to have much of an impact on valuation. 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. Currently, the most bullish analyst values Freightways Group at NZ$16.20 per share, while the most bearish prices it at NZ$13.67. This is a very narrow spread of estimates, implying either that Freightways Group is an easy company to value, or - more likely - the analysts are relying heavily on some key assumptions.
Of course, another way to look at these forecasts is to place them into context against the industry itself. It's pretty clear that there is an expectation that Freightways Group's revenue growth will slow down substantially, with revenues to the end of 2027 expected to display 9.4% growth on an annualised basis. This is compared to a historical growth rate of 12% over the past five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 4.2% annually. Even after the forecast slowdown in growth, it seems obvious that Freightways Group is also expected to grow faster than 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 Freightways Group. Happily, there were no major changes to revenue forecasts, with the business still expected to grow faster than the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.
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 estimates - from multiple Freightways Group analysts - going out to 2029, and you can see them free on our platform here.
You still need to take note of risks, for example - Freightways Group has 1 warning sign we think you should be aware of.
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.