VERBUND AG (VIE:VER) Analysts Just Slashed Next Year's Revenue Estimates By 15%

The analysts covering VERBUND AG (VIE:VER) delivered a dose of negativity to shareholders today, by making a substantial revision to their statutory forecasts for next year. There was a fairly draconian cut to their revenue estimates, perhaps an implicit admission that previous forecasts were much too optimistic.

Following the latest downgrade, the nine analysts covering VERBUND provided consensus estimates of €9.5b revenue in 2024, which would reflect a stressful 24% decline on its sales over the past 12 months. Statutory earnings per share are anticipated to decline 18% to €6.25 in the same period. Before this latest update, the analysts had been forecasting revenues of €11b and earnings per share (EPS) of €6.46 in 2024. It looks like analyst sentiment has fallen somewhat in this update, with a substantial drop in revenue estimates and a minor downgrade to earnings per share numbers as well.

See our latest analysis for VERBUND

Analysts made no major changes to their price target of €77.56, suggesting the downgrades are not expected to have a long-term impact on VERBUND's valuation.

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. We would highlight that sales are expected to reverse, with a forecast 20% annualised revenue decline to the end of 2024. That is a notable change from historical growth of 34% over the last five years. By contrast, our data suggests that other companies (with analyst coverage) in the industry are forecast to see their revenue decline 2.9% annually for the foreseeable future. The forecasts do look bearish for VERBUND, since they're expecting it to shrink faster than the industry.

The Bottom Line

The most important thing to take away is that analysts cut their earnings per share estimates, expecting a clear decline in business conditions. Unfortunately they also downgraded their revenue estimates, and our aggregation of analyst estimates suggests that VERBUND revenue is expected to perform worse than the wider market. Given the stark change in sentiment, we'd understand if investors became more cautious on VERBUND after today.

Still, the long-term prospects of the business are much more relevant than next year's earnings. We have estimates - from multiple VERBUND analysts - going out to 2026, and you can see them free on our platform here.

Of course, seeing company management invest large sums of money in a stock can be just as useful as knowing whether analysts are downgrading their estimates. So you may also wish to search this free list of stocks that insiders are buying.

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