Earnings Update: Erste Group Bank AG (VIE:EBS) Just Reported Its First-Quarter Results And Analysts Are Updating Their Forecasts

Last week saw the newest quarterly earnings release from Erste Group Bank AG (VIE:EBS), an important milestone in the company's journey to build a stronger business. Results overall were respectable, with statutory earnings of €6.81 per share roughly in line with what the analysts had forecast. Revenues of €2.8b came in 4.3% ahead of analyst predictions. 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. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.

View our latest analysis for Erste Group Bank

Taking into account the latest results, Erste Group Bank's nine analysts currently expect revenues in 2024 to be €10.5b, approximately in line with the last 12 months. Statutory earnings per share are expected to drop 13% to €6.75 in the same period. In the lead-up to this report, the analysts had been modelling revenues of €10.5b and earnings per share (EPS) of €6.40 in 2024. 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 €49.40, 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. Currently, the most bullish analyst values Erste Group Bank at €60.00 per share, while the most bearish prices it at €43.00. Analysts definitely have varying views on the business, but the spread of estimates is not wide enough in our view to suggest that extreme outcomes could await Erste Group Bank shareholders.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Erste Group Bank's past performance and to peers in the same industry. It's pretty clear that there is an expectation that Erste Group Bank's revenue growth will slow down substantially, with revenues to the end of 2024 expected to display 0.7% growth on an annualised basis. This is compared to a historical growth rate of 9.1% 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 3.3% 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 Erste Group Bank.

The Bottom Line

The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around Erste Group Bank'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 Erste Group Bank'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 said, the long-term trajectory of the company's earnings is a lot more important than next year. We have forecasts for Erste Group Bank going out to 2026, and you can see them free on our platform here.

And what about risks? Every company has them, and we've spotted 2 warning signs for Erste Group Bank (of which 1 is concerning!) you should know about.

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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.