Conzzeta AG (VTX:CON) Analysts Are Cutting Their Estimates: Here's What You Need To Know

Conzzeta AG (VTX:CON) shareholders are probably feeling a little disappointed, since its shares fell 4.8% to CHF1,238 in the week after its latest annual results. It was a credible result overall, with revenues of CHF1.3b and statutory earnings per share of CHF31.46 both in line with analyst estimates, showing that Conzzeta is executing in line with expectations. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Conzzeta after the latest results.

Check out our latest analysis for Conzzeta

After the latest results, the consensus from Conzzeta's five analysts is for revenues of CHF1.05b in 2021, which would reflect a considerable 18% decline in sales compared to the last year of performance. Statutory earnings per share are expected to fall 12% to CHF27.55 in the same period. In the lead-up to this report, the analysts had been modelling revenues of CHF1.28b and earnings per share (EPS) of CHF33.95 in 2021. Indeed, we can see that the analysts are a lot more bearish about Conzzeta's prospects following the latest results, administering a real cut to revenue estimates and slashing their EPS estimates to boot.

The analysts made no major changes to their price target of CHF1,329, suggesting the downgrades are not expected to have a long-term impact on Conzzeta's 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. The most optimistic Conzzeta analyst has a price target of CHF1,400 per share, while the most pessimistic values it at CHF1,280. With such a narrow range of valuations, the analysts apparently share similar views on what they think the business is worth.

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. We would highlight that sales are expected to reverse, with a forecast 18% annualised revenue decline to the end of 2021. That is a notable change from historical growth of 5.0% over the last five years. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 5.8% per year. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Conzzeta is expected to lag the wider industry.

The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Conzzeta. Unfortunately, they also downgraded their revenue estimates, and our data indicates revenues are expected to perform worse than the wider industry. Even so, earnings per share are more important to the intrinsic value of the business. The consensus price target held steady at CHF1,329, with the latest estimates not enough to have an impact on their price targets.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have forecasts for Conzzeta going out to 2023, and you can see them free on our platform here.

Plus, you should also learn about the 3 warning signs we've spotted with Conzzeta .

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