Stock Analysis

Earnings Miss: UBM Development AG Missed EPS By 8.2% And Analysts Are Revising Their Forecasts

  •  Updated
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UBM Development AG (VIE:UBS) shareholders are probably feeling a little disappointed, since its shares fell 2.4% to €41.10 in the week after its latest full-year results. Revenues of €278m were in line with forecasts, although statutory earnings per share (EPS) came in below expectations at €4.50, missing estimates by 8.2%. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. 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 UBM Development

WBAG:UBS Earnings and Revenue Growth April 13th 2022

Taking into account the latest results, the consensus forecast from UBM Development's six analysts is for revenues of €348.0m in 2022, which would reflect a sizeable 25% improvement in sales compared to the last 12 months. Statutory earnings per share are forecast to shrink 3.1% to €4.36 in the same period. Yet prior to the latest earnings, the analysts had been anticipated revenues of €346.6m and earnings per share (EPS) of €5.51 in 2022. The analysts seem to have become more bearish following the latest results. While there were no changes to revenue forecasts, there was a pretty serious reduction to EPS estimates.

The consensus price target held steady at €53.80, with the analysts seemingly voting that their lower forecast earnings are not expected to lead to a lower stock price in the foreseeable future. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. The most optimistic UBM Development analyst has a price target of €55.00 per share, while the most pessimistic values it at €51.00. Still, with such a tight range of estimates, it suggeststhe 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. For example, we noticed that UBM Development's rate of growth is expected to accelerate meaningfully, with revenues forecast to exhibit 25% growth to the end of 2022 on an annualised basis. That is well above its historical decline of 16% a year over the past five years. Compare this against analyst estimates for the broader industry, which suggest that (in aggregate) industry revenues are expected to decline 0.1% per year. So although UBM Development is expected to return to growth, it's also expected to grow revenues during a time when the wider industry is estimated to see revenue decline.

The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for UBM Development. On the plus side, they made no changes to their revenue estimates - and they expect sales to perform better 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 UBM Development going out to 2024, and you can see them free on our platform here.

Before you take the next step you should know about the 3 warning signs for UBM Development (1 doesn't sit too well with us!) that we have uncovered.

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