Earnings Miss: Brenntag SE Missed EPS By 6.0% And Analysts Are Revising Their Forecasts

Brenntag SE (ETR:BNR) just released its latest yearly report and things are not looking great. Brenntag missed analyst forecasts, with revenues of €17b and statutory earnings per share (EPS) of €4.73, falling short by 2.6% and 6.0% respectively. 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 thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

View our latest analysis for Brenntag

After the latest results, the 15 analysts covering Brenntag are now predicting revenues of €17.7b in 2024. If met, this would reflect a modest 5.1% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to increase 8.8% to €5.38. In the lead-up to this report, the analysts had been modelling revenues of €17.8b and earnings per share (EPS) of €5.35 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.

The analysts reconfirmed their price target of €86.88, showing that the business is executing well and in line with expectations. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. The most optimistic Brenntag analyst has a price target of €105 per share, while the most pessimistic values it at €70.00. Analysts definitely have varying views on the business, but the spread of estimates is not wide enough in our view to suggest that extreme outcomes could await Brenntag shareholders.

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 Brenntag's revenue growth is expected to slow, with the forecast 5.1% annualised growth rate until the end of 2024 being well below the historical 10% p.a. growth over the last five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 3.1% annually. Even after the forecast slowdown in growth, it seems obvious that Brenntag is also expected to grow faster than the wider 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. Fortunately, they also reconfirmed their revenue numbers, suggesting that it's tracking in line with expectations. Additionally, our data suggests that revenue is 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 Brenntag. Long-term earnings power is much more important than next year's profits. We have forecasts for Brenntag going out to 2026, and you can see them free on our platform here.

You can also see whether Brenntag is carrying too much debt, and whether its balance sheet is healthy, for free on our platform here.

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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.