Earnings Update: RATIONAL Aktiengesellschaft (ETR:RAA) Just Reported Its Annual Results And Analysts Are Updating Their Forecasts

Investors in RATIONAL Aktiengesellschaft (ETR:RAA) had a good week, as its shares rose 3.8% to close at €799 following the release of its yearly results. Results were roughly in line with estimates, with revenues of €1.1b and statutory earnings per share of €18.98. 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. 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 RATIONAL

Following the latest results, RATIONAL's 13 analysts are now forecasting revenues of €1.19b in 2024. This would be a modest 5.3% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to accumulate 7.0% to €20.31. Yet prior to the latest earnings, the analysts had been anticipated revenues of €1.18b and earnings per share (EPS) of €19.62 in 2024. So the consensus seems to have become somewhat more optimistic on RATIONAL's earnings potential following these results.

The consensus price target was unchanged at €681, implying that the improved earnings outlook is not expected to have a long term impact on value creation for shareholders. 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. The most optimistic RATIONAL analyst has a price target of €800 per share, while the most pessimistic values it at €500. 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 RATIONAL shareholders.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the RATIONAL's past performance and to peers in the same industry. We would highlight that RATIONAL's revenue growth is expected to slow, with the forecast 5.3% annualised growth rate until the end of 2024 being well below the historical 8.2% 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) 3.6% per year. Even after the forecast slowdown in growth, it seems obvious that RATIONAL is also expected to grow faster than the wider industry.

The Bottom Line

The most important thing here is that the analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards RATIONAL following these results. 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. The consensus price target held steady at €681, with the latest estimates not enough to have an impact on their price targets.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have estimates - from multiple RATIONAL 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 - RATIONAL has 1 warning sign we think you should be aware of.

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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.