Barco NV Just Missed EPS By 29%: Here's What Analysts Think Will Happen Next

Investors in Barco NV (EBR:BAR) had a good week, as its shares rose 9.8% to close at €19.44 following the release of its annual results. Statutory earnings per share fell badly short of expectations, coming in at €0.10, some 29% below analyst forecasts, although revenues were okay, approximately in line with analyst estimates at €804m. 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.

View our latest analysis for Barco

Taking into account the latest results, the current consensus from Barco's three analysts is for revenues of €973.4m in 2022, which would reflect a major 21% increase on its sales over the past 12 months. Per-share earnings are expected to leap 516% to €0.61. In the lead-up to this report, the analysts had been modelling revenues of €979.8m and earnings per share (EPS) of €0.77 in 2022. So there's definitely been a decline in sentiment after the latest results, noting the pretty serious reduction to new EPS forecasts.

It might be a surprise to learn that the consensus price target was broadly unchanged at €23.00, with the analysts clearly implying that the forecast decline in earnings is not expected to have much of an impact on valuation. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. There are some variant perceptions on Barco, with the most bullish analyst valuing it at €27.00 and the most bearish at €20.00 per share. Analysts definitely have varying views on the business, but the spread of estimates is not wide enough in our view to suggest that extreme outcomes could await Barco shareholders.

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. One thing stands out from these estimates, which is that Barco is forecast to grow faster in the future than it has in the past, with revenues expected to display 21% annualised growth until the end of 2022. If achieved, this would be a much better result than the 7.5% annual decline over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in the industry are forecast to see their revenue grow 9.7% per year. So it looks like Barco is expected to grow faster than its competitors, at least for a while.

The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Barco. Fortunately, they also reconfirmed their revenue numbers, suggesting sales are tracking in line with expectations - and our data suggests that revenues are expected to grow faster 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.

Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. At Simply Wall St, we have a full range of analyst estimates for Barco going out to 2023, and you can see them free on our platform here..

It is also worth noting that we have found 3 warning signs for Barco (1 is a bit unpleasant!) that you need to take into consideration.

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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.