Last week, you might have seen that Air New Zealand Limited (NZSE:AIR) released its yearly result to the market. The early response was not positive, with shares down 7.2% to NZ$0.39 in the past week. Revenue hit NZ$7.0b in line with forecasts, although the company reported a statutory loss per share of NZ$0.074 that was somewhat smaller than the analysts expected. 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 Air New Zealand after the latest results.
Taking into account the latest results, the consensus forecast from Air New Zealand's six analysts is for revenues of NZ$7.41b in 2027. This reflects a satisfactory 5.6% improvement in revenue compared to the last 12 months. Yet prior to the latest earnings, the analysts had been anticipated revenues of NZ$7.28b and earnings per share (EPS) of NZ$0.032 in 2027. While the analysts have made no real change to their revenue estimates, we can see that the consensus is now modelling a loss next year - a clear dip in sentiment compared to the previous outlook of a profit.
Check out our latest analysis for Air New Zealand
As a result, there was no major change to the consensus price target of NZ$0.45, with the analysts implicitly confirming that the business looks to be performing in line with expectations, despite higher forecast losses. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. The most optimistic Air New Zealand analyst has a price target of NZ$0.75 per share, while the most pessimistic values it at NZ$0.35. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the business.
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. We would highlight that Air New Zealand's revenue growth is expected to slow, with the forecast 5.6% annualised growth rate until the end of 2027 being well below the historical 19% p.a. growth over the last five years. Compare this to the 81 other companies in this industry with analyst coverage, which are forecast to grow their revenue at 6.3% per year. Factoring in the forecast slowdown in growth, it looks like Air New Zealand is forecast to grow at about the same rate as the wider industry.
The Bottom Line
The biggest low-light for us was that the forecasts for Air New Zealand dropped from profits to a loss next year. Happily, there were no real changes to revenue forecasts, with the business still expected to grow in line with the overall 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.
With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have estimates - from multiple Air New Zealand analysts - going out to 2029, and you can see them free on our platform here.
We also provide an overview of the Air New Zealand Board and CEO remuneration and length of tenure at the company, and whether insiders have been buying the stock, here.
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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.