One thing we could say about the analysts on NagaCorp Ltd. (HKG:3918) - they aren't optimistic, having just made a major negative revision to their near-term (statutory) forecasts for the organization. Both revenue and earnings per share (EPS) estimates were cut sharply as the analysts factored in the latest outlook for the business, concluding that they were too optimistic previously.
Following the downgrade, the consensus from seven analysts covering NagaCorp is for revenues of US$572m in 2026, implying a not inconsiderable 10% decline in sales compared to the last 12 months. Statutory earnings per share are anticipated to crater 20% to US$0.055 in the same period. Previously, the analysts had been modelling revenues of US$668m and earnings per share (EPS) of US$0.067 in 2026. It looks like analyst sentiment has declined substantially, with a substantial drop in revenue estimates and a considerable drop in earnings per share numbers as well.
View our latest analysis for NagaCorp
It'll come as no surprise then, to learn that the analysts have cut their price target 13% to US$0.64. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. Currently, the most bullish analyst values NagaCorp at US$0.85 per share, while the most bearish prices it at US$0.37. This is a fairly broad spread of estimates, suggesting that the analysts are forecasting a wide range of possible outcomes for the business.
Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. These estimates imply that sales are expected to slow, with a forecast annualised revenue decline of 20% by the end of 2026. This indicates a significant reduction from annual growth of 12% 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 9.1% annually for the foreseeable future. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - NagaCorp is expected to lag the wider industry.
The Bottom Line
The biggest issue in the new estimates is that analysts have reduced their earnings per share estimates, suggesting business headwinds lay ahead for NagaCorp. Regrettably, they also downgraded their revenue estimates, and the latest forecasts imply the business will grow sales slower than the wider market. With a serious cut to this year's expectations and a falling price target, we wouldn't be surprised if investors were becoming wary of NagaCorp.
Even so, the longer term trajectory of the business is much more important for the value creation of shareholders. We have estimates - from multiple NagaCorp analysts - going out to 2028, and you can see them free on our platform here.
Of course, seeing company management invest large sums of money in a stock can be just as useful as knowing whether analysts are downgrading their estimates. So you may also wish to search this free list of stocks with high insider ownership.
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