Fertiglobe plc Just Beat EPS By 8.4%: Here's What Analysts Think Will Happen Next

Fertiglobe plc (ADX:FERTIGLB) shareholders are probably feeling a little disappointed, since its shares fell 3.4% to د.إ5.48 in the week after its latest yearly results. Fertiglobe missed revenue estimates by 2.5%, with sales of US$3.3b, although statutory earnings per share (EPS) of US$0.085 beat expectations, coming in 8.4% ahead of analyst estimates. The 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. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.

Check out our latest analysis for Fertiglobe

Taking into account the latest results, the most recent consensus for Fertiglobe from nine analysts is for revenues of US$4.76b in 2022 which, if met, would be a major 44% increase on its sales over the past 12 months. Statutory earnings per share are predicted to surge 101% to US$0.17. In the lead-up to this report, the analysts had been modelling revenues of US$4.76b and earnings per share (EPS) of US$0.094 in 2022. There was no real change to the revenue estimates, but the analysts do seem more bullish on earnings, given the massive increase in earnings per share expectations following these results.

There's been no major changes to the consensus price target of د.إ5.00, suggesting that the improved earnings per share outlook is not enough to have a long-term positive impact on the stock's valuation. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. There are some variant perceptions on Fertiglobe, with the most bullish analyst valuing it at د.إ7.10 and the most bearish at د.إ3.40 per share. So we wouldn't be assigning too much credibility to analyst price targets in this case, because there are clearly some widely different views on what kind of performance this business can generate. As a result it might not be a great idea to make decisions based on the consensus price target, which is after all just an average of this wide range of estimates.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Fertiglobe's past performance and to peers in the same industry. It's clear from the latest estimates that Fertiglobe's rate of growth is expected to accelerate meaningfully, with the forecast 44% annualised revenue growth to the end of 2022 noticeably faster than its historical growth of 32% p.a. over the past three years. Compare this with other companies in the same industry, which are forecast to grow their revenue 12% annually. Factoring in the forecast acceleration in revenue, it's pretty clear that Fertiglobe is expected to grow much faster than its industry.

The Bottom Line

The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around Fertiglobe's earnings potential next year. Happily, there were no major changes to revenue forecasts, with the business still expected to grow faster 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 said, the long-term trajectory of the company's earnings is a lot more important than next year. At Simply Wall St, we have a full range of analyst estimates for Fertiglobe going out to 2024, and you can see them free on our platform here..

Don't forget that there may still be risks. For instance, we've identified 2 warning signs for Fertiglobe (1 is concerning) 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.