BayWa Aktiengesellschaft Reported A Surprise Loss, And Analysts Have Updated Their Forecasts

Shareholders of BayWa Aktiengesellschaft (ETR:BYW) will be pleased this week, given that the stock price is up 19% to €33.80 following its latest annual results. Revenues fell 5.6% short of expectations, at €24b. Earnings correspondingly dipped, with BayWa reporting a statutory loss of €2.84 per share, whereas the analysts had previously modelled a profit in this period. 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. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on BayWa after the latest results.

See our latest analysis for BayWa

After the latest results, the three analysts covering BayWa are now predicting revenues of €26.0b in 2024. If met, this would reflect a decent 8.5% improvement in revenue compared to the last 12 months. BayWa is also expected to turn profitable, with statutory earnings of €1.53 per share. In the lead-up to this report, the analysts had been modelling revenues of €26.0b and earnings per share (EPS) of €1.52 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 €46.00, suggesting that the company has met expectations in its recent result. 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 BayWa at €52.00 per share, while the most bearish prices it at €40.00. Even so, with a relatively close grouping of estimates, it looks like the analysts are quite confident in their valuations, suggesting BayWa is an easy business to forecast or the the analysts are all using similar assumptions.

Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. We would highlight that BayWa's revenue growth is expected to slow, with the forecast 8.5% annualised growth rate until the end of 2024 being well below the historical 12% p.a. growth over the last five years. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 3.2% per year. So it's pretty clear that, while BayWa's revenue growth is expected to slow, it's still expected to grow faster than the industry itself.

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.

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. We have forecasts for BayWa going out to 2026, 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 2 warning signs with BayWa (at least 1 which is a bit unpleasant) , and understanding them 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.