Analysts Have Been Trimming Their ElringKlinger AG (ETR:ZIL2) Price Target After Its Latest Report

Shareholders might have noticed that ElringKlinger AG (ETR:ZIL2) filed its second-quarter result this time last week. The early response was not positive, with shares down 5.8% to €4.34 in the past week. Revenues came in 3.3% below expectations, at €445m. Statutory earnings per share were relatively better off, with a per-share profit of €0.62 being roughly in line with analyst estimates. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.

See our latest analysis for ElringKlinger

Taking into account the latest results, ElringKlinger's six analysts currently expect revenues in 2024 to be €1.83b, approximately in line with the last 12 months. Statutory earnings per share are forecast to fall 17% to €0.70 in the same period. Before this earnings report, the analysts had been forecasting revenues of €1.85b and earnings per share (EPS) of €0.64 in 2024. There was no real change to the revenue estimates, but the analysts do seem more bullish on earnings, given the substantial gain in earnings per share expectations following these results.

The average the analysts price target fell 11% to €6.83, suggesting thatthe analysts have other concerns, and the improved earnings per share outlook was not enough to allay them. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. There are some variant perceptions on ElringKlinger, with the most bullish analyst valuing it at €10.50 and the most bearish at €4.70 per share. Note the wide gap in analyst price targets? This implies to us that there is a fairly broad range of possible scenarios for the underlying business.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the ElringKlinger's past performance and to peers in the same industry. The period to the end of 2024 brings more of the same, according to the analysts, with revenue forecast to display 3.7% growth on an annualised basis. That is in line with its 3.1% annual growth over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenues grow 5.8% per year. So it's pretty clear that ElringKlinger is expected to grow slower than similar companies in the same industry.

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 ElringKlinger following these results. 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 fell measurably, with the analysts seemingly not reassured by the latest results, leading to a lower estimate of ElringKlinger's future valuation.

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

It is also worth noting that we have found 2 warning signs for ElringKlinger that you need to take into consideration.

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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.