SYNLAB AG (FRA:SYAB) Interim Results Just Came Out: Here's What Analysts Are Forecasting For This Year

There's been a notable change in appetite for SYNLAB AG (FRA:SYAB) shares in the week since its interim report, with the stock down 17% to €15.89. It was a credible result overall, with revenues of €1.9b and statutory earnings per share of €2.81 both in line with analyst estimates, showing that SYNLAB is executing in line with expectations. 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 collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.

View our latest analysis for SYNLAB

After the latest results, the consensus from SYNLAB's eight analysts is for revenues of €3.23b in 2022, which would reflect a definite 12% decline in sales compared to the last year of performance. Statutory earnings per share are forecast to decline 11% to €1.62 in the same period. In the lead-up to this report, the analysts had been modelling revenues of €3.18b and earnings per share (EPS) of €1.42 in 2022. Although the revenue estimates have not really changed, we can see there's been a nice gain to earnings per share expectations, suggesting that the analysts have become more bullish after the latest result.

There's been no major changes to the consensus price target of €22.06, suggesting that the improved earnings per share outlook is not enough to have a long-term positive impact on the stock'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 SYNLAB, with the most bullish analyst valuing it at €26.00 and the most bearish at €17.10 per share. 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.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the SYNLAB's past performance and to peers in the same industry. These estimates imply that sales are expected to slow, with a forecast annualised revenue decline of 23% by the end of 2022. This indicates a significant reduction from annual growth of 3.7% over the last year. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 4.2% annually for the foreseeable future. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - SYNLAB is expected to lag 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 SYNLAB following these results. On the plus side, there were no major changes to revenue estimates; although forecasts imply revenues will 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.

Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. We have forecasts for SYNLAB going out to 2024, and you can see them free on our platform here.

It is also worth noting that we have found 3 warning signs for SYNLAB (1 is a bit unpleasant!) that you need to take into consideration.

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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.