Mayr-Melnhof Karton AG (VIE:MMK) came out with its full-year results last week, and we wanted to see how the business is performing and what industry forecasters think of the company following this report. It was a credible result overall, with revenues of €2.5b and statutory earnings per share of €8.06 both in line with analyst estimates, showing that Mayr-Melnhof Karton is executing in line with expectations. 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.
Taking into account the latest results, the consensus forecast from Mayr-Melnhof Karton's four analysts is for revenues of €2.73b in 2021, which would reflect a reasonable 7.9% improvement in sales compared to the last 12 months. Per-share earnings are expected to climb 10% to €8.89. Before this earnings report, the analysts had been forecasting revenues of €2.81b and earnings per share (EPS) of €10.05 in 2021. From this we can that sentiment has definitely become more bearish after the latest results, leading to lower revenue forecasts and a real cut to earnings per share estimates.
Despite the cuts to forecast earnings, there was no real change to the €201 price target, showing that the analysts don't think the changes have a meaningful impact on its intrinsic value. 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. The most optimistic Mayr-Melnhof Karton analyst has a price target of €211 per share, while the most pessimistic values it at €190. Still, with such a tight range of estimates, it suggeststhe analysts have a pretty good idea of what they think the company is worth.
Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. It's clear from the latest estimates that Mayr-Melnhof Karton's rate of growth is expected to accelerate meaningfully, with the forecast 7.9% annualised revenue growth to the end of 2021 noticeably faster than its historical growth of 3.0% p.a. over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 4.8% annually. Factoring in the forecast acceleration in revenue, it's pretty clear that Mayr-Melnhof Karton is expected to grow much faster than its industry.
The Bottom Line
The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Mayr-Melnhof Karton. Regrettably, they also downgraded their revenue estimates, but the latest forecasts still imply the business will grow faster than the wider industry. The consensus price target held steady at €201, with the latest estimates not enough to have an impact on their price targets.
Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have forecasts for Mayr-Melnhof Karton going out to 2025, and you can see them free on our platform here.
Don't forget that there may still be risks. For instance, we've identified 1 warning sign for Mayr-Melnhof Karton that you should be aware of.
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