Knorr-Bremse AG Just Missed Earnings - But Analysts Have Updated Their Models

It's shaping up to be a tough period for Knorr-Bremse AG (ETR:KBX), which a week ago released some disappointing third-quarter results that could have a notable impact on how the market views the stock. Results look to have been somewhat negative - revenue fell 2.2% short of analyst estimates at €1.9b, and statutory earnings of €0.89 per share missed forecasts by 8.1%. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.

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Taking into account the latest results, the current consensus from Knorr-Bremse's 13 analysts is for revenues of €8.26b in 2026. This would reflect a credible 4.3% increase on its revenue over the past 12 months. Per-share earnings are expected to jump 66% to €4.48. Before this earnings report, the analysts had been forecasting revenues of €8.33b and earnings per share (EPS) of €4.59 in 2026. So it looks like there's been a small decline in overall sentiment after the recent results - there's been no major change to revenue estimates, but the analysts did make a minor downgrade to their earnings per share forecasts.

View our latest analysis for Knorr-Bremse

It might be a surprise to learn that the consensus price target was broadly unchanged at €88.21, with the analysts clearly implying that the forecast decline in earnings is not expected to have much of an impact on valuation. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. There are some variant perceptions on Knorr-Bremse, with the most bullish analyst valuing it at €101 and the most bearish at €65.00 per share. 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 Knorr-Bremse shareholders.

One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. It's pretty clear that there is an expectation that Knorr-Bremse's revenue growth will slow down substantially, with revenues to the end of 2026 expected to display 3.4% growth on an annualised basis. This is compared to a historical growth rate of 5.8% over the past five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 5.6% per year. Factoring in the forecast slowdown in growth, it seems obvious that Knorr-Bremse is also expected to grow slower than other industry participants.

The Bottom Line

The most important thing to take away is that the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment 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 held steady at €88.21, with the latest estimates not enough to have an impact on their price targets.

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 estimates - from multiple Knorr-Bremse analysts - going out to 2027, and you can see them free on our platform here.

And what about risks? Every company has them, and we've spotted 1 warning sign for Knorr-Bremse you should know about.

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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.