Symrise AG Just Missed EPS By 7.0%: Here's What Analysts Think Will Happen Next

Investors in Symrise AG (ETR:SY1) had a good week, as its shares rose 3.7% to close at €101 following the release of its annual results. Revenues of €3.5b were in line with forecasts, although statutory earnings per share (EPS) came in below expectations at €2.22, missing estimates by 7.0%. 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.

See our latest analysis for Symrise

Taking into account the latest results, the most recent consensus for Symrise from 21 analysts is for revenues of €3.69b in 2021 which, if met, would be a modest 4.7% increase on its sales over the past 12 months. Statutory earnings per share are predicted to swell 15% to €2.62. Yet prior to the latest earnings, the analysts had been anticipated revenues of €3.72b and earnings per share (EPS) of €2.67 in 2021. 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 minor downgrade to their earnings per share forecasts.

The consensus price target held steady at €105, with the analysts seemingly voting that their lower forecast earnings are not expected to lead to a lower stock price in the foreseeable future. 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 Symrise analyst has a price target of €142 per share, while the most pessimistic values it at €81.00. 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. It's pretty clear that there is an expectation that Symrise's revenue growth will slow down substantially, with revenues to the end of 2021 expected to display 4.7% growth on an annualised basis. This is compared to a historical growth rate of 5.9% over the past five years. Compare this to the 19 other companies in this industry with analyst coverage, which are forecast to grow their revenue at 4.8% per year. So it's pretty clear that, while Symrise's revenue growth is expected to slow, it's expected to grow roughly in line with the 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. Happily, there were no real changes to sales forecasts, with the business still expected to grow in line with the overall 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. At Simply Wall St, we have a full range of analyst estimates for Symrise going out to 2025, and you can see them free on our platform here..

Even so, be aware that Symrise is showing 1 warning sign in our investment analysis , you should know about...

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This article by Simply Wall St is general in nature. 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.
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