Yahoo Finance STEF S.A. Just Reported Earnings, And Analysts Cut Their Target Price
STEF S.A. (EPA:STF) last week reported its latest full-year results, which makes it a good time for investors to dive in and see if the business is performing in line with expectations. It was an okay result overall, with revenues coming in at €3.4b, roughly what analysts had been expecting. Analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. We thought readers would find it interesting to see analysts' latest (statutory) post-earnings forecasts for next year.
See our latest analysis for STEF
Following the latest results, STEF's three analysts are now forecasting revenues of €3.54b in 2020. This would be a credible 2.9% improvement in sales compared to the last 12 months. Statutory earnings per share are forecast to decline 12% to €7.25 in the same period. Before this earnings report, analysts had been forecasting revenues of €3.54b and earnings per share (EPS) of €7.25 in 2020. So it's pretty clear that, although analysts have updated their estimates, there's been no major change in expectations for the business following the latest results.
The consensus price target fell -5.8% to €88.53, suggesting that analysts might have been a bit enthusiastic in their previous valuation - or they were expecting the company to provide stronger guidance in the annual results. 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. Currently, the most bullish analyst values STEF at €93.00 per share, while the most bearish prices it at €83.00. Still, with such a tight range of estimates, it suggests analysts have a pretty good idea of what they think the company is worth.
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. We would highlight that STEF's revenue growth is expected to slow, with forecast 2.9% increase next year well below the historical 4.6%p.a. growth over the last five years. By way of comparison, other companies in this market with analyst coverage, are forecast to grow their revenue at 0.2% next year. Even after the forecast slowdown in growth, it seems obvious that analysts still thinkSTEF will grow faster than the wider market.
The Bottom Line
The most important thing to take away is that there's been no major change in sentiment, with analysts reconfirming that earnings per share are expected to continue performing in line with their prior expectations. Fortunately, analysts also reconfirmed their revenue estimates, suggesting sales are tracking in line with expectations - and our data does suggest that STEF's revenues are expected to grow faster than the wider market. The consensus price target fell measurably, with analysts seemingly not reassured by the latest results, leading to a lower estimate of STEF's future valuation.
With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have forecasts for STEF going out to 2021, and you can see them free on our platform here.
You can also view our analysis of STEF's balance sheet, and whether we think STEF is carrying too much debt, for free on our platform here.
If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Thank you for reading.
