EFG International AG Just Recorded A 8.3% EPS Beat: Here's What Analysts Are Forecasting Next

Investors in EFG International AG (VTX:EFGN) had a good week, as its shares rose 3.4% to close at CHF12.18 following the release of its full-year results. The result was positive overall - although revenues of CHF1.4b were in line with what the analysts predicted, EFG International surprised by delivering a statutory profit of CHF0.91 per share, modestly greater than expected. 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 EFG International after the latest results.

View our latest analysis for EFG International

Following the recent earnings report, the consensus from four analysts covering EFG International is for revenues of CHF1.38b in 2024. This implies a noticeable 2.8% decline in revenue compared to the last 12 months. Statutory earnings per share are expected to shrink 5.3% to CHF0.94 in the same period. In the lead-up to this report, the analysts had been modelling revenues of CHF1.44b and earnings per share (EPS) of CHF0.88 in 2024. So it's pretty clear that while sentiment around revenues has declined following the latest results, the analysts are now more bullish on the company's earnings power.

The average price target increased 15% to CHF12.01, with the analysts signalling that the improved earnings outlook is more important to the company's valuation than its revenue. 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. The most optimistic EFG International analyst has a price target of CHF13.12 per share, while the most pessimistic values it at CHF11.40. The narrow spread of estimates could suggest that the business' future is relatively easy to value, or thatthe analysts have a strong view on its prospects.

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. We would highlight that revenue is expected to reverse, with a forecast 2.8% annualised decline to the end of 2024. That is a notable change from historical growth of 4.6% over the last five years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 6.7% annually for the foreseeable future. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - EFG International is expected to lag the wider industry.

The Bottom Line

The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around EFG International's earnings potential next year. On the negative side, they also downgraded their revenue estimates, and forecasts imply they will perform worse than the wider industry. Even so, earnings per share are more important to the intrinsic value of the business. There was also a nice increase in the price target, with the analysts clearly feeling that the intrinsic value of the business is improving.

With that in mind, we wouldn't be too quick to come to a conclusion on EFG International. Long-term earnings power is much more important than next year's profits. We have forecasts for EFG International going out to 2026, and you can see them free on our platform here.

And what about risks? Every company has them, and we've spotted 1 warning sign for EFG International you should know about.

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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.