Results: Siemens Energy AG Confounded Analyst Expectations With A Surprise Profit

Last week, you might have seen that Siemens Energy AG (FRA:ENR) released its second-quarter result to the market. The early response was not positive, with shares down 5.6% to €26.28 in the past week. Revenues of €6.5b missed analyst estimates by a little bit, but statutory earnings beat expectations by an impressive , coming in at €0.03 per share. 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 gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.

See our latest analysis for Siemens Energy

After the latest results, the 15 analysts covering Siemens Energy are now predicting revenues of €29.0b in 2021. If met, this would reflect a credible 5.9% improvement in sales compared to the last 12 months. Losses are predicted to fall substantially, shrinking 96% to €0.077. Before this latest report, the consensus had been expecting revenues of €29.1b and €0.014 per share in losses. While this year's revenue estimates held steady, there was also a regrettable increase in loss per share expectations, suggesting the consensus has a bit of a mixed view on the stock.

The consensus price target held steady at €36.60, seemingly implying that the higher forecast losses are not expected to have a long term impact on the company's valuation. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. There are some variant perceptions on Siemens Energy, with the most bullish analyst valuing it at €43.00 and the most bearish at €29.00 per share. As you can see, analysts are not all in agreement on the stock's future, but the range of estimates is still reasonably narrow, which could suggest that the outcome is not totally unpredictable.

Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. One thing stands out from these estimates, which is that Siemens Energy is forecast to grow faster in the future than it has in the past, with revenues expected to display 12% annualised growth until the end of 2021. If achieved, this would be a much better result than the 3.6% annual decline over the past year. Compare this against analyst estimates for the broader industry, which suggest that (in aggregate) industry revenues are expected to grow 7.1% annually. Not only are Siemens Energy's revenues expected to improve, it seems that the analysts are also expecting it to grow faster than the wider industry.

The Bottom Line

The most important thing to take away is that the analysts increased their loss per share estimates for next year. Fortunately, they also reconfirmed their revenue numbers, suggesting sales are tracking in line with expectations - and our data suggests that revenues are 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.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have estimates - from multiple Siemens Energy analysts - going out to 2025, and you can see them free on our platform here.

Plus, you should also learn about the 1 warning sign we've spotted with Siemens Energy .

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