Earnings Beat: DEME Group NV Just Beat Analyst Forecasts, And Analysts Have Been Updating Their Models

As you might know, DEME Group NV (EBR:DEME) just kicked off its latest half-yearly results with some very strong numbers. DEME Group delivered a significant beat to revenue and earnings per share (EPS) expectations, hitting €1.9b-10% above indicated-and€5.57-64% above forecasts- respectively 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. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on DEME Group after the latest results.

Check out our latest analysis for DEME Group

Taking into account the latest results, DEME Group's six analysts currently expect revenues in 2024 to be €3.76b, approximately in line with the last 12 months. Statutory earnings per share are forecast to fall 16% to €9.08 in the same period. In the lead-up to this report, the analysts had been modelling revenues of €3.71b and earnings per share (EPS) of €8.86 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 €181, 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. There are some variant perceptions on DEME Group, with the most bullish analyst valuing it at €200 and the most bearish at €157 per share. The narrow spread of estimates could suggest that the business' future is relatively easy to value, or thatthe analysts have a strong view on its prospects.

Of course, another way to look at these forecasts is to place them into context against the industry itself. We would highlight that DEME Group's revenue growth is expected to slow, with the forecast 0.9% annualised growth rate until the end of 2024 being well below the historical 32% growth over the last year. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 4.8% per year. Factoring in the forecast slowdown in growth, it seems obvious that DEME Group is also expected to grow slower than other industry participants.

The Bottom Line

The most important thing here is that the analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards DEME Group following these results. On the plus side, there were no major changes to revenue estimates; although forecasts imply they will perform worse than the wider industry. The consensus price target held steady at €181, with the latest estimates not enough to have an impact on their price targets.

With that in mind, we wouldn't be too quick to come to a conclusion on DEME Group. Long-term earnings power is much more important than next year's profits. At Simply Wall St, we have a full range of analyst estimates for DEME Group going out to 2026, and you can see them free on our platform here..

It might also be worth considering whether DEME Group's debt load is appropriate, using our debt analysis tools on the Simply Wall St 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.