Investors in NORMA Group SE (ETR:NOEJ) had a good week, as its shares rose 4.4% to close at €17.22 following the release of its half-year results. It looks like a credible result overall - although revenues of €575m were what the analysts expected, NORMA Group surprised by delivering a statutory profit of €0.04 per share, instead of the previously forecast loss. 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. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.
Following last week's earnings report, NORMA Group's seven analysts are forecasting 2025 revenues to be €1.13b, approximately in line with the last 12 months. Per-share earnings are expected to jump 631% to €0.23. In the lead-up to this report, the analysts had been modelling revenues of €1.14b and earnings per share (EPS) of €0.30 in 2025. So there's definitely been a decline in sentiment after the latest results, noting the large cut to new EPS forecasts.
View our latest analysis for NORMA Group
The consensus price target held steady at €17.84, with the analysts seemingly voting that their lower forecast earnings are not expected to lead to a lower stock price in the foreseeable future. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. Currently, the most bullish analyst values NORMA Group at €27.00 per share, while the most bearish prices it at €7.90. With such a wide range in price targets, analysts are almost certainly betting on widely divergent outcomes in the underlying business. As a result it might not be a great idea to make decisions based on the consensus price target, which is after all just an average of this wide range of estimates.
Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. We would highlight that NORMA Group's revenue growth is expected to slow, with the forecast 1.8% annualised growth rate until the end of 2025 being well below the historical 3.9% p.a. growth over the last five years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 5.5% annually. Factoring in the forecast slowdown in growth, it seems obvious that NORMA Group 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. 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 NORMA Group going out to 2027, and you can see them free on our platform here.
Before you take the next step you should know about the 3 warning signs for NORMA Group (1 can't be ignored!) that we have uncovered.
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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.