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Shareholders of Metcash Limited (ASX:MTS) will be pleased this week, given that the stock price is up 11% to AU$3.43 following its latest half-year results. Metcash reported in line with analyst predictions, delivering revenues of AU$8.5b and statutory earnings per share of AU$0.26, suggesting the business is executing well and in line with its plan. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Metcash after the latest results.
View our latest analysis for Metcash
After the latest results, the 13 analysts covering Metcash are now predicting revenues of AU$17.4b in 2025. If met, this would reflect a modest 5.2% improvement in revenue compared to the last 12 months. Per-share earnings are expected to accumulate 3.9% to AU$0.24. Yet prior to the latest earnings, the analysts had been anticipated revenues of AU$17.4b and earnings per share (EPS) of AU$0.24 in 2025. So the consensus seems to have become somewhat more optimistic on Metcash's earnings potential following these results.
There's been no major changes to the consensus price target of AU$3.79, suggesting that the improved earnings per share outlook is not enough to have a long-term positive impact on the stock's valuation. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. Currently, the most bullish analyst values Metcash at AU$4.60 per share, while the most bearish prices it at AU$3.10. 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 Metcash 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 clear from the latest estimates that Metcash's rate of growth is expected to accelerate meaningfully, with the forecast 11% annualised revenue growth to the end of 2025 noticeably faster than its historical growth of 5.0% p.a. over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 3.0% annually. Factoring in the forecast acceleration in revenue, it's pretty clear that Metcash is expected to grow much faster than its industry.