Encavis AG (ETR:ECV) shareholders are probably feeling a little disappointed, since its shares fell 4.7% to €19.26 in the week after its latest quarterly results. Revenues came in 4.9% below expectations, at €128m. Statutory earnings per share were relatively better off, with a per-share profit of €0.52 being roughly in line with analyst estimates. This is an important time for investors, as they can track a company’s performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.
See our latest analysis for Encavis
Taking into account the latest results, the consensus forecast from Encavis’ nine analysts is for revenues of €452.3m in 2023, which would reflect a satisfactory 5.6% improvement in sales compared to the last 12 months. Statutory earnings per share are forecast to sink 16% to €0.49 in the same period. Yet prior to the latest earnings, the analysts had been anticipated revenues of €455.8m and earnings per share (EPS) of €0.48 in 2023. So it’s pretty clear that, although the analysts have updated their estimates, there’s been no major change in expectations for the business following the latest results.
There were no changes to revenue or earnings estimates or the price target of €24.26, suggesting that the company has met expectations in its recent result. 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 Encavis analyst has a price target of €30.00 per share, while the most pessimistic values it at €19.00. This shows there is still a bit of diversity in estimates, but analysts don’t appear to be totally split on the stock as though it might be a success or failure situation.
These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Encavis’ past performance and to peers in the same industry. We would highlight that Encavis’ revenue growth is expected to slow, with the forecast 4.4% annualised growth rate until the end of 2023 being well below the historical 9.5% p.a. growth over the last five years. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 5.2% annually. Factoring in the forecast slowdown in growth, it looks like Encavis is forecast to grow at about the same rate as the wider industry.
The Bottom Line
The most important thing to take away is that there’s been no major change in sentiment, with the analysts reconfirming that the business is performing in line with their previous earnings per share estimates. Happily, there were no real changes to sales 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 in mind, we wouldn’t be too quick to come to a conclusion on Encavis. Long-term earnings power is much more important than next year’s profits. We have estimates – from multiple Encavis analysts – going out to 2024, and you can see them free on our platform here.
However, before you get too enthused, we’ve discovered 3 warning signs for Encavis (1 is concerning!) that 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.
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