Analysts Are Updating Their K+S Aktiengesellschaft (ETR:SDF) Estimates After Its Half-Year Results

Shareholders might have noticed that K+S Aktiengesellschaft (ETR:SDF) filed its interim result this time last week. The early response was not positive, with shares down 2.1% to €11.25 in the past week. Revenues of €1.9b were in line with expectations, although statutory losses per share were €0.03, some 10% smaller than 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 thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

Check out our latest analysis for K+S

Taking into account the latest results, the 16 analysts covering K+S provided consensus estimates of €3.62b revenue in 2024, which would reflect a small 2.5% decline over the past 12 months. Statutory earnings per share are predicted to jump 1,048% to €0.28. In the lead-up to this report, the analysts had been modelling revenues of €3.59b and earnings per share (EPS) of €0.29 in 2024. The analysts seem to have become a little more negative on the business after the latest results, given the small dip in their earnings per share numbers for next year.

It might be a surprise to learn that the consensus price target was broadly unchanged at €14.35, with the analysts clearly implying that the forecast decline in earnings is not expected to have much of an impact on valuation. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. There are some variant perceptions on K+S, with the most bullish analyst valuing it at €19.00 and the most bearish at €10.00 per share. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the business.

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. These estimates imply that revenue is expected to slow, with a forecast annualised decline of 4.9% by the end of 2024. This indicates a significant reduction from annual growth of 12% over the last five years. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 4.5% per year. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - K+S is expected to lag the wider industry.

The Bottom Line

The most important thing to take away is that the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting that it's tracking in line with expectations. Although our data does suggest that K+S' revenue is expected to perform worse than the wider industry. The consensus price target held steady at €14.35, 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 K+S. Long-term earnings power is much more important than next year's profits. We have forecasts for K+S going out to 2026, and you can see them free on our platform here.

Before you take the next step you should know about the 3 warning signs for K+S that we have uncovered.

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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.