Stock Analysis

Fresenius Medical Care AG Earnings Missed Analyst Estimates: Here's What Analysts Are Forecasting Now

Published
XTRA:FME

Fresenius Medical Care AG (ETR:FME) just released its latest half-yearly report and things are not looking great. Results showed a clear earnings miss, with €4.8b revenue coming in 4.8% lower than what the analystsexpected. Statutory earnings per share (EPS) of €0.64 missed the mark badly, arriving some 95% below what was expected. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.

See our latest analysis for Fresenius Medical Care

XTRA:FME Earnings and Revenue Growth August 2nd 2024

Taking into account the latest results, Fresenius Medical Care's 18 analysts currently expect revenues in 2024 to be €19.4b, approximately in line with the last 12 months. Statutory earnings per share are predicted to bounce 20% to €2.17. Yet prior to the latest earnings, the analysts had been anticipated revenues of €19.5b and earnings per share (EPS) of €2.28 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 small dip in their earnings per share forecasts.

The consensus price target held steady at €39.03, with the analysts seemingly voting that their lower forecast earnings are not expected to lead to a lower stock price in the foreseeable future. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. The most optimistic Fresenius Medical Care analyst has a price target of €60.00 per share, while the most pessimistic values it at €26.00. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the business.

Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. It's pretty clear that there is an expectation that Fresenius Medical Care's revenue growth will slow down substantially, with revenues to the end of 2024 expected to display 0.1% growth on an annualised basis. This is compared to a historical growth rate of 2.9% over the past five years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 3.7% annually. So it's pretty clear that, while revenue growth is expected to slow down, the wider industry is also expected to grow faster than Fresenius Medical Care.

The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Fresenius Medical Care. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting that it's tracking in line with expectations. Although our data does suggest that Fresenius Medical Care's revenue is expected to 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.

With that in mind, we wouldn't be too quick to come to a conclusion on Fresenius Medical Care. Long-term earnings power is much more important than next year's profits. We have forecasts for Fresenius Medical Care going out to 2026, 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 Fresenius Medical Care 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.