Yahoo Finance Earnings Beat: BASF SE Just Beat Analyst Forecasts, And Analysts Have Been Updating Their Models
Shareholders might have noticed that BASF SE (ETR:BAS) filed its first-quarter result this time last week. The early response was not positive, with shares down 3.2% to €48.83 in the past week. It looks to have been a decent result overall - while revenue fell marginally short of analyst estimates at €18b, statutory earnings beat expectations by a notable 34%, coming in at €1.53 per share. 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. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.
Check out our latest analysis for BASF
Taking into account the latest results, the most recent consensus for BASF from 19 analysts is for revenues of €68.2b in 2024. If met, it would imply a modest 2.6% increase on its revenue over the past 12 months. Statutory earnings per share are predicted to bounce 8,349% to €2.93. In the lead-up to this report, the analysts had been modelling revenues of €69.6b and earnings per share (EPS) of €2.86 in 2024. So the consensus seems to have become somewhat more optimistic on BASF's earnings potential following these results.
The consensus price target was unchanged at €55.29, implying that the improved earnings outlook is not expected to have a long term impact on value creation for shareholders. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. The most optimistic BASF analyst has a price target of €72.00 per share, while the most pessimistic values it at €42.50. There are definitely some different views on the stock, but the range of estimates is not wide enough as to imply that the situation is unforecastable, in our view.
One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. It's pretty clear that there is an expectation that BASF's revenue growth will slow down substantially, with revenues to the end of 2024 expected to display 3.5% growth on an annualised basis. This is compared to a historical growth rate of 7.0% over the past five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 4.2% per year. So it's pretty clear that, while revenue growth is expected to slow down, the wider industry is also expected to grow faster than BASF.
The Bottom Line
The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around BASF's earnings potential next year. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting that it's tracking in line with expectations. Although our data does suggest that BASF's revenue is expected to perform worse 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.
With that in mind, we wouldn't be too quick to come to a conclusion on BASF. Long-term earnings power is much more important than next year's profits. At Simply Wall St, we have a full range of analyst estimates for BASF going out to 2026, and you can see them free on our platform here..
You should always think about risks though. Case in point, we've spotted 3 warning signs for BASF you should be aware of, and 1 of them is a bit concerning.
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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.
