Results: Swisscom AG Exceeded Expectations And The Consensus Has Updated Its Estimates

Shareholders might have noticed that Swisscom AG (VTX:SCMN) filed its first-quarter result this time last week. The early response was not positive, with shares down 2.2% to CHF494 in the past week. Swisscom reported CHF2.7b in revenue, roughly in line with analyst forecasts, although statutory earnings per share (EPS) of CHF8.78 beat expectations, being 9.9% higher than what the analysts expected. 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. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.

View our latest analysis for Swisscom

Taking into account the latest results, Swisscom's ten analysts currently expect revenues in 2024 to be CHF11.0b, approximately in line with the last 12 months. Statutory earnings per share are forecast to decrease 2.6% to CHF32.42 in the same period. In the lead-up to this report, the analysts had been modelling revenues of CHF11.0b and earnings per share (EPS) of CHF32.17 in 2024. The consensus analysts don't seem to have seen anything in these results that would have changed their view on the business, given there's been no major change to their estimates.

There were no changes to revenue or earnings estimates or the price target of CHF557, suggesting that the company has met expectations in its recent result. 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. The most optimistic Swisscom analyst has a price target of CHF750 per share, while the most pessimistic values it at CHF421. These price targets show that analysts do have some differing views on the business, but the estimates do not vary enough to suggest to us that some are betting on wild success or utter failure.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Swisscom's past performance and to peers in the same industry. From these estimates it looks as though the analysts expect the years of declining revenue to come to an end, given the flat forecast out to 2024. That would be a definite improvement, given that the past five years have seen revenue shrink 1.0% annually. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenue grow 2.0% per year. So it's pretty clear that, although revenues are improving, Swisscom is still expected to grow slower than the industry.

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. On the plus side, there were no major changes to revenue estimates; although forecasts imply they will perform worse than the wider industry. The consensus price target held steady at CHF557, with the latest estimates not enough to have an impact on their price targets.

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

Don't forget that there may still be risks. For instance, we've identified 2 warning signs for Swisscom (1 is a bit unpleasant) 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.