Newsflash: VERBUND AG (VIE:VER) Analysts Have Been Trimming Their Revenue Forecasts

Market forces rained on the parade of VERBUND AG (VIE:VER) shareholders today, when the analysts downgraded their forecasts for this year. This report focused on revenue estimates, and it looks as though the consensus view of the business has become substantially more conservative.

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Following the downgrade, the consensus from seven analysts covering VERBUND is for revenues of €7.5b in 2025, implying a not inconsiderable 13% decline in sales compared to the last 12 months. Statutory earnings per share are supposed to fall 15% to €4.33 in the same period. Previously, the analysts had been modelling revenues of €8.5b and earnings per share (EPS) of €4.43 in 2025. It looks like analyst sentiment has fallen somewhat in this update, with a substantial drop in revenue estimates and a small dip in earnings per share numbers as well.

View our latest analysis for VERBUND

Analysts made no major changes to their price target of €66.31, suggesting the downgrades are not expected to have a long-term impact on VERBUND's valuation.

Of course, another way to look at these forecasts is to place them into context against the industry itself. We would highlight that sales are expected to reverse, with a forecast 13% annualised revenue decline to the end of 2025. That is a notable change from historical growth of 20% over the last five years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 2.0% annually for the foreseeable future. It's pretty clear that VERBUND's revenues are expected to perform substantially worse than the wider industry.

The Bottom Line

The biggest issue in the new estimates is that analysts have reduced their earnings per share estimates, suggesting business headwinds lay ahead for VERBUND. Unfortunately analysts also downgraded their revenue estimates, and industry data suggests that VERBUND's revenues are expected to grow slower than the wider market. Overall, given the drastic downgrade to this year's forecasts, we'd be feeling a little more wary of VERBUND going forwards.

Unfortunately, by using these new estimates as a starting point, we've run a discounted cash flow calculation (DCF) on VERBUND that suggests the company could be somewhat overvalued. You can learn more about our valuation methodology for free on our platform here.

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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.