Analysts Are Updating Their Stratec SE (ETR:SBS) Estimates After Its Annual Results

Investors in Stratec SE (ETR:SBS) had a good week, as its shares rose 9.2% to close at €123 following the release of its annual results. Results were roughly in line with estimates, with revenues of €287m and statutory earnings per share of €3.28. 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. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

View our latest analysis for Stratec

After the latest results, the five analysts covering Stratec are now predicting revenues of €293.3m in 2022. If met, this would reflect a modest 2.1% improvement in sales compared to the last 12 months. Statutory earnings per share are forecast to decrease 6.9% to €3.07 in the same period. Before this earnings report, the analysts had been forecasting revenues of €305.7m and earnings per share (EPS) of €3.36 in 2022. The analysts are less bullish than they were before these results, given the reduced revenue forecasts and the small dip in earnings per share expectations.

The analysts made no major changes to their price target of €135, suggesting the downgrades are not expected to have a long-term impact on Stratec's valuation. 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 Stratec analyst has a price target of €159 per share, while the most pessimistic values it at €103. These price targets show that analysts do have some differing views on the business, but the estimates do not vary enough to suggest to us that some are betting on wild success or utter failure.

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. We would highlight that Stratec's revenue growth is expected to slow, with the forecast 2.1% annualised growth rate until the end of 2022 being well below the historical 8.4% 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 7.5% annually. Factoring in the forecast slowdown in growth, it seems obvious that Stratec is also expected to grow slower than other industry participants.

The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Stratec. Unfortunately, they also downgraded their revenue estimates, and our data indicates revenues are expected to perform worse than the wider industry. Even so, earnings per share are more important to the intrinsic value of the business. The consensus price target held steady at €135, with the latest estimates not enough to have an impact on their price targets.

With that in mind, we wouldn't be too quick to come to a conclusion on Stratec. Long-term earnings power is much more important than next year's profits. We have estimates - from multiple Stratec analysts - going out to 2024, and you can see them free on our platform here.

You can also see whether Stratec is carrying too much debt, and whether its balance sheet is healthy, for free on our platform here.

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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.