Yahoo Finance Results: Brenntag SE Exceeded Expectations And The Consensus Has Updated Its Estimates
It's been a good week for Brenntag SE (ETR:BNR) shareholders, because the company has just released its latest first-quarter results, and the shares gained 2.1% to €76.24. Revenues were €4.5b, approximately in line with expectations, although statutory earnings per share (EPS) performed substantially better. EPS of €1.40 were also better than expected, beating analyst predictions by 12%. 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. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.
See our latest analysis for Brenntag
Taking into account the latest results, the 15 analysts covering Brenntag provided consensus estimates of €18.8b revenue in 2023, which would reflect a perceptible 3.3% decline on its sales over the past 12 months. Statutory earnings per share are expected to decrease 3.1% to €5.35 in the same period. Yet prior to the latest earnings, the analysts had been anticipated revenues of €18.5b and earnings per share (EPS) of €5.15 in 2023. The analysts seems to have become more bullish on the business, judging by their new earnings per share estimates.
The consensus price target was unchanged at €87.50, implying that the improved earnings outlook is not expected to have a long term impact on value creation for shareholders. 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. There are some variant perceptions on Brenntag, with the most bullish analyst valuing it at €100.00 and the most bearish at €73.00 per share. As you can see, analysts are not all in agreement on the stock's future, but the range of estimates is still reasonably narrow, which could suggest that the outcome is not totally unpredictable.
These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Brenntag's past performance and to peers in the same industry. These estimates imply that sales are expected to slow, with a forecast annualised revenue decline of 4.3% by the end of 2023. This indicates a significant reduction from annual growth of 9.5% 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 4.3% annually for the foreseeable future. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Brenntag is expected to lag the wider industry.
The Bottom Line
The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around Brenntag's earnings potential next year. On the plus side, there were no major changes to revenue estimates; although forecasts imply revenues will perform worse than the wider industry. The consensus price target held steady at €87.50, with the latest estimates not enough to have an impact on their price targets.
With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have estimates - from multiple Brenntag analysts - going out to 2025, and you can see them free on our platform here.
You can also see whether Brenntag is carrying too much debt, and whether its balance sheet is healthy, for free on our platform here.
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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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