Fresenius SE & Co. KGaA (ETR:FRE) Analysts Just Trimmed Their Revenue Forecasts By 34%

The analysts covering Fresenius SE & Co. KGaA (ETR:FRE) delivered a dose of negativity to shareholders today, by making a substantial revision to their statutory forecasts for next year. Revenue estimates were cut sharply as analysts signalled a weaker outlook - perhaps a sign that investors should temper their expectations as well.

Following the latest downgrade, the four analysts covering Fresenius SE KGaA provided consensus estimates of €29b revenue in 2024, which would reflect a disturbing 31% decline on its sales over the past 12 months. Per-share earnings are expected to surge 70% to €2.84. Before this latest update, the analysts had been forecasting revenues of €44b and earnings per share (EPS) of €3.06 in 2024. It looks like analyst sentiment has fallen somewhat in this update, with a pretty serious reduction to revenue estimates and a small dip in earnings per share numbers as well.

See our latest analysis for Fresenius SE KGaA

Analysts made no major changes to their price target of €38.66, suggesting the downgrades are not expected to have a long-term impact on Fresenius SE KGaA's valuation.

One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. We would highlight that sales are expected to reverse, with a forecast 25% annualised revenue decline to the end of 2024. That is a notable change from historical growth of 2.7% over the last five years. Yet aggregate analyst estimates for other companies in the industry suggest that industry revenues are forecast to decline 1.4% per year. The forecasts do look bearish for Fresenius SE KGaA, since they're expecting it to shrink faster than the industry.

The Bottom Line

The biggest issue in the new estimates is that analysts have reduced their earnings per share estimates, suggesting business headwinds lay ahead for Fresenius SE KGaA. Unfortunately they also downgraded their revenue estimates, and our aggregation of analyst estimates suggests that Fresenius SE KGaA revenue is expected to perform worse than the wider market. Given the stark change in sentiment, we'd understand if investors became more cautious on Fresenius SE KGaA after today.

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 Fresenius SE KGaA analysts - going out to 2025, and you can see them free on our platform here.

Of course, seeing company management invest large sums of money in a stock can be just as useful as knowing whether analysts are downgrading their estimates. So you may also wish to search this free list of stocks that insiders are buying.

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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.