The investors in Heidelberger Druckmaschinen Aktiengesellschaft's (ETR:HDD) will be rubbing their hands together with glee today, after the share price leapt 20% to €0.63 in the week following its half-year results. 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. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Heidelberger Druckmaschinen after the latest results.
Taking into account the latest results, the current consensus, from the five analysts covering Heidelberger Druckmaschinen, is for revenues of €1.94b in 2021, which would reflect a noticeable 5.8% reduction in Heidelberger Druckmaschinen's sales over the past 12 months. Losses are predicted to fall substantially, shrinking 82% to €0.22. Before this earnings announcement, the analysts had been modelling revenues of €1.96b and losses of €0.23 per share in 2021. So there seems to have been a moderate uplift in analyst sentiment with the latest consensus release, given the upgrade to loss per share forecasts for this year.
Even with the lower forecast losses, the analysts lowered their valuations, with the average price target falling 13% to €0.67. It looks likethe analysts have become less optimistic about the overall business. 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 Heidelberger Druckmaschinen, with the most bullish analyst valuing it at €0.90 and the most bearish at €0.44 per share. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the business.
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. One more thing stood out to us about these estimates, and it's the idea that Heidelberger Druckmaschinen'sdecline is expected to accelerate, with revenues forecast to fall 5.8% next year, topping off a historical decline of 2.0% a year over the past five years. Compare this against analyst estimates for companies in the wider industry, which suggest that revenues (in aggregate) are expected to grow 6.7% next year. So while a broad number of companies are forecast to decline, unfortunately Heidelberger Druckmaschinen is expected to see its sales affected worse than other companies in the industry.
The Bottom Line
The most obvious conclusion is that the analysts made no changes to their forecasts for a loss next year. On the plus side, there were no major changes to revenue estimates; although forecasts imply revenues will perform worse than the wider industry. Furthermore, the analysts also cut their price targets, suggesting that the latest news has led to greater pessimism about the intrinsic value of the business.
With that said, the long-term trajectory of the company's earnings is a lot more important than next year. At Simply Wall St, we have a full range of analyst estimates for Heidelberger Druckmaschinen going out to 2025, and you can see them free on our platform here..
However, before you get too enthused, we've discovered 1 warning sign for Heidelberger Druckmaschinen that you should be aware of.
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