Earnings Beat: Helvetia Holding AG Just Beat Analyst Forecasts, And Analysts Have Been Updating Their Models

Investors in Helvetia Holding AG (VTX:HELN) had a good week, as its shares rose 3.9% to close at CHF126 following the release of its yearly results. Results look mixed - while revenue fell marginally short of analyst estimates at CHF11b, statutory earnings beat expectations 7.8%, with Helvetia Holding reporting profits of CHF10.60 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 collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.

Check out our latest analysis for Helvetia Holding

Taking into account the latest results, the current consensus from Helvetia Holding's three analysts is for revenues of CHF12.1b in 2023, which would reflect a meaningful 14% increase on its sales over the past 12 months. Statutory earnings per share are expected to decrease 5.0% to CHF10.33 in the same period. Yet prior to the latest earnings, the analysts had been anticipated revenues of CHF11.3b and earnings per share (EPS) of CHF10.45 in 2023. There doesn't appear to have been a major change in sentiment following the results, other than the small increase to revenue estimates.

The analysts increased their price target 5.7% to CHF111, perhaps signalling that higher revenues are a strong leading indicator for Helvetia Holding's valuation. 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 Helvetia Holding at CHF121 per share, while the most bearish prices it at CHF93.00. With such a narrow range of valuations, the analysts apparently share similar views on what they think the business is worth.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Helvetia Holding's past performance and to peers in the same industry. It's clear from the latest estimates that Helvetia Holding's rate of growth is expected to accelerate meaningfully, with the forecast 14% annualised revenue growth to the end of 2023 noticeably faster than its historical growth of 4.9% p.a. over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 6.0% annually. Factoring in the forecast acceleration in revenue, it's pretty clear that Helvetia Holding is expected to grow much faster than its industry.

The Bottom Line

The most obvious conclusion is that there's been no major change in the business' prospects in recent times, with the analysts holding their earnings forecasts steady, in line with previous estimates. Happily, they also upgraded their revenue estimates, and are forecasting revenues to grow faster than the wider industry. There was also a nice increase in the price target, with the analysts clearly feeling that the intrinsic value of the business is improving.

Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. At Simply Wall St, we have a full range of analyst estimates for Helvetia Holding going out to 2025, 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 1 warning sign with Helvetia Holding , and understanding this 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.