The Swatch Group AG Just Missed Earnings With A Surprise Loss - Here Are Analysts Latest Forecasts

As you might know, The Swatch Group AG (VTX:UHR) recently reported its yearly numbers. It was a pretty negative result overall, with revenues of CHF5.6b missing analyst predictions by 4.4%. Worse, the business reported a statutory loss of CHF0.99 per share, a substantial decline on analyst expectations of a profit. 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 Swatch Group after the latest results.

See our latest analysis for Swatch Group

Taking into account the latest results, the most recent consensus for Swatch Group from 21 analysts is for revenues of CHF7.12b in 2021 which, if met, would be a huge 27% increase on its sales over the past 12 months. Swatch Group is also expected to turn profitable, with statutory earnings of CHF11.95 per share. Before this earnings report, the analysts had been forecasting revenues of CHF7.14b and earnings per share (EPS) of CHF9.86 in 2021. Although the revenue estimates have not really changed, we can see there's been a great increase in earnings per share expectations, suggesting that the analysts have become more bullish after the latest result.

There's been no major changes to the consensus price target of CHF257, suggesting that the improved earnings per share outlook is not enough to have a long-term positive impact on the stock'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. There are some variant perceptions on Swatch Group, with the most bullish analyst valuing it at CHF310 and the most bearish at CHF215 per share. 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.

Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. For example, we noticed that Swatch Group's rate of growth is expected to accelerate meaningfully, with revenues forecast to grow 27%, well above its historical decline of 3.4% a year over the past five years. Compare this against analyst estimates for the wider industry, which suggest that (in aggregate) industry revenues are expected to grow 9.7% next year. So it looks like Swatch Group is expected to grow faster than its competitors, at least for a while.

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 Swatch Group following these results. 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.

With that in mind, we wouldn't be too quick to come to a conclusion on Swatch Group. Long-term earnings power is much more important than next year's profits. We have estimates - from multiple Swatch Group analysts - going out to 2025, and you can see them free on our platform here.

We don't want to rain on the parade too much, but we did also find 1 warning sign for Swatch Group that you need to be mindful of.

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This article by Simply Wall St is general in nature. 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.
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