Analysts Have Made A Financial Statement On Krones AG's (ETR:KRN) Full-Year Report

Investors in Krones AG (ETR:KRN) had a good week, as its shares rose 3.6% to close at €123 following the release of its annual results. It looks like the results were a bit of a negative overall. While revenues of €4.8b were in line with analyst predictions, statutory earnings were less than expected, missing estimates by 3.3% to hit €7.11 per share. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.

See our latest analysis for Krones

Taking into account the latest results, the current consensus from Krones' ten analysts is for revenues of €5.27b in 2024. This would reflect a decent 11% increase on its revenue over the past 12 months. Statutory earnings per share are predicted to ascend 15% to €8.15. In the lead-up to this report, the analysts had been modelling revenues of €5.27b and earnings per share (EPS) of €8.79 in 2024. 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.

It might be a surprise to learn that the consensus price target was broadly unchanged at €137, 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. The most optimistic Krones analyst has a price target of €158 per share, while the most pessimistic values it at €112. 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 Krones shareholders.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Krones' past performance and to peers in the same industry. It's clear from the latest estimates that Krones' rate of growth is expected to accelerate meaningfully, with the forecast 11% annualised revenue growth to the end of 2024 noticeably faster than its historical growth of 3.4% p.a. over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 3.2% annually. Factoring in the forecast acceleration in revenue, it's pretty clear that Krones is expected to grow much faster than its industry.

The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Krones. 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 Krones. Long-term earnings power is much more important than next year's profits. We have estimates - from multiple Krones analysts - going out to 2026, and you can see them free on our platform here.

You still need to take note of risks, for example - Krones has 2 warning signs (and 1 which is a bit concerning) we think 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.