What Does The Future Hold For MA Financial Group Limited (ASX:MAF)? These Analysts Have Been Cutting Their Estimates

Market forces rained on the parade of MA Financial Group Limited (ASX:MAF) shareholders today, when the analysts downgraded their forecasts for this year. Revenue estimates were cut sharply as analysts signalled a weaker outlook - perhaps a sign that investors should temper their expectations as well. At AU$4.55, shares are up 4.4% in the past 7 days. Investors could be forgiven for changing their mind on the business following the downgrade; but it's not clear if the revised forecasts will lead to selling activity.

After the downgrade, the consensus from MA Financial Group's dual analysts is for revenues of AU$282m in 2023, which would reflect a painful 61% decline in sales compared to the last year of performance. Statutory earnings per share are presumed to accumulate 3.5% to AU$0.26. Before this latest update, the analysts had been forecasting revenues of AU$319m and earnings per share (EPS) of AU$0.28 in 2023. It looks like analyst sentiment has fallen somewhat in this update, with a measurable cut to revenue estimates and a small dip in earnings per share numbers as well.

View our latest analysis for MA Financial Group

Despite the cuts to forecast earnings, there was no real change to the AU$7.10 price target, showing that the analysts don't think the changes have a meaningful impact on its intrinsic value.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the MA Financial Group's past performance and to peers in the same industry. We would highlight that sales are expected to reverse, with a forecast 61% annualised revenue decline to the end of 2023. That is a notable change from historical growth of 41% over the last five years. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 2.8% per year. It's pretty clear that MA Financial Group's revenues are expected to perform substantially worse than the wider industry.

The Bottom Line

The most important thing to take away is that analysts cut their earnings per share estimates, expecting a clear decline in business conditions. Regrettably, they also downgraded their revenue estimates, and the latest forecasts imply the business will grow sales slower than the wider market. Often, one downgrade can set off a daisy-chain of cuts, especially if an industry is in decline. So we wouldn't be surprised if the market became a lot more cautious on MA Financial Group after today.

As you can see, the analysts clearly aren't bullish, and there might be good reason for that. We've identified some potential issues with MA Financial Group's financials, such as concerns around earnings quality. For more information, you can click here to discover this and the 1 other concern we've identified.

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 that insiders are buying.

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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.