Adecco Group AG Just Missed EPS By 36%: Here's What Analysts Think Will Happen Next

Last week, you might have seen that Adecco Group AG (VTX:ADEN) released its quarterly result to the market. The early response was not positive, with shares down 4.9% to CHF28.50 in the past week. It looks like a pretty bad result, all things considered. Although revenues of €5.8b were in line with analyst predictions, statutory earnings fell badly short, missing estimates by 36% to hit €0.34 per share. 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. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.

Check out our latest analysis for Adecco Group

Taking into account the latest results, Adecco Group's 13 analysts currently expect revenues in 2024 to be €23.7b, approximately in line with the last 12 months. Per-share earnings are expected to surge 22% to €2.20. Before this earnings report, the analysts had been forecasting revenues of €23.7b and earnings per share (EPS) of €2.21 in 2024. So it's pretty clear that, although the analysts have updated their estimates, there's been no major change in expectations for the business following the latest results.

There were no changes to revenue or earnings estimates or the price target of CHF36.24, suggesting that the company has met expectations in its recent result. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. Currently, the most bullish analyst values Adecco Group at CHF42.61 per share, while the most bearish prices it at CHF27.39. This shows there is still a bit of diversity in estimates, but analysts don't appear to be totally split on the stock as though it might be a success or failure situation.

Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. It's pretty clear that there is an expectation that Adecco Group's revenue growth will slow down substantially, with revenues to the end of 2024 expected to display 0.4% growth on an annualised basis. This is compared to a historical growth rate of 1.9% over the past five years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 5.7% annually. Factoring in the forecast slowdown in growth, it seems obvious that Adecco Group is also expected to grow slower than other industry participants.

The Bottom Line

The most important thing to take away is that there's been no major change in sentiment, with the analysts reconfirming that the business is performing in line with their previous earnings per share estimates. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting that it's tracking in line with expectations. Although our data does suggest that Adecco Group's revenue is expected to perform worse 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.

With that in mind, we wouldn't be too quick to come to a conclusion on Adecco 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 Adecco Group going out to 2026, and you can see them free on our platform here..

That said, it's still necessary to consider the ever-present spectre of investment risk. We've identified 3 warning signs with Adecco Group , and understanding these should be part of your investment process.

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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.