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.

The Bottom Line

The most important thing here is that the analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards Metcash following these results. Fortunately, they also reconfirmed their revenue numbers, suggesting that it's tracking in line with expectations. Additionally, our data suggests that revenue is 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 Metcash analysts - going out to 2027, and you can see them free on our platform here.

You still need to take note of risks, for example - Metcash has 3 warning signs we think you should be aware of.

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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.