Stadler Rail AG Just Missed EPS By 25%: Here's What Analysts Think Will Happen Next

It's shaping up to be a tough period for Stadler Rail AG (VTX:SRAIL), which a week ago released some disappointing annual results that could have a notable impact on how the market views the stock. It wasn't a great result overall - while revenue fell marginally short of analyst estimates at CHF3.6b, statutory earnings missed forecasts by an incredible 25%, coming in at just CHF1.34 per share. 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. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

Check out our latest analysis for Stadler Rail

Taking into account the latest results, the most recent consensus for Stadler Rail from nine analysts is for revenues of CHF3.96b in 2022 which, if met, would be a decent 9.0% increase on its sales over the past 12 months. Statutory earnings per share are predicted to soar 24% to CHF1.66. In the lead-up to this report, the analysts had been modelling revenues of CHF4.03b and earnings per share (EPS) of CHF2.20 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 fell 11% to CHF39.76, with the analysts clearly linking lower forecast earnings to the performance of the stock price. 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. Currently, the most bullish analyst values Stadler Rail at CHF52.50 per share, while the most bearish prices it at CHF27.00. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the business.

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 Stadler Rail's revenue growth is expected to slow, with the forecast 9.0% annualised growth rate until the end of 2022 being well below the historical 17% p.a. growth over the last three years. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 6.2% per year. Even after the forecast slowdown in growth, it seems obvious that Stadler Rail is also expected to grow faster than 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 Stadler Rail. 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. The consensus price target fell measurably, with the analysts seemingly not reassured by the latest results, leading to a lower estimate of Stadler Rail's future valuation.

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 Stadler Rail going out to 2024, and you can see them free on our platform here.

Don't forget that there may still be risks. For instance, we've identified 1 warning sign for Stadler Rail that you should be aware of.

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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.