Yahoo Finance thyssenkrupp AG Just Missed EPS By 14%: Here's What Analysts Think Will Happen Next
thyssenkrupp AG (ETR:TKA) shareholders are probably feeling a little disappointed, since its shares fell 4.6% to €6.83 in the week after its latest first-quarter results. Revenues were in line with forecasts, at €9.0b, although statutory earnings per share came in 14% below what the analysts expected, at €0.12 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. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.
View our latest analysis for thyssenkrupp
After the latest results, the consensus from thyssenkrupp's seven analysts is for revenues of €36.0b in 2023, which would reflect a chunky 12% decline in sales compared to the last year of performance. Statutory earnings per share are expected to nosedive 58% to €0.75 in the same period. Before this earnings report, the analysts had been forecasting revenues of €35.1b and earnings per share (EPS) of €0.66 in 2023. So it seems there's been a definite increase in optimism about thyssenkrupp's future following the latest results, with a nice increase in the earnings per share forecasts in particular.
Althoughthe analysts have upgraded their earnings estimates, there was no change to the consensus price target of €9.41, suggesting that the forecast performance does not have a long term impact on the company's valuation. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. The most optimistic thyssenkrupp analyst has a price target of €16.00 per share, while the most pessimistic values it at €5.90. With such a wide range in price targets, analysts are almost certainly betting on widely divergent outcomes in the underlying business. With this in mind, we wouldn't rely too heavily the consensus price target, as it is just an average and analysts clearly have some deeply divergent views on the business.
Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. These estimates imply that sales are expected to slow, with a forecast annualised revenue decline of 16% by the end of 2023. This indicates a significant reduction from annual growth of 0.0001% over the last five years. Yet aggregate analyst estimates for other companies in the industry suggest that industry revenues are forecast to decline 1.6% per year. So it's pretty clear that thyssenkrupp's revenues are expected to shrink faster than 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 thyssenkrupp's earnings potential next year. They also upgraded their revenue estimates, with sales apparently performing well, although revenues are expected to lag the wider industry this year. 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 said, the long-term trajectory of the company's earnings is a lot more important than next year. We have forecasts for thyssenkrupp going out to 2025, and you can see them free on our platform here.
Even so, be aware that thyssenkrupp is showing 2 warning signs in our investment analysis , you should know about...
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
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.
Join A Paid User Research Session
You’ll receive a US$30 Amazon Gift card for 1 hour of your time while helping us build better investing tools for the individual investors like yourself. Sign up here
