Wacker Chemie AG Beat Analyst Estimates: See What The Consensus Is Forecasting For This Year

Shareholders might have noticed that Wacker Chemie AG (ETR:WCH) filed its annual result this time last week. The early response was not positive, with shares down 5.0% to €110 in the past week. It looks like a credible result overall - although revenues of €4.7b were in line with what the analysts predicted, Wacker Chemie surprised by delivering a statutory profit of €3.81 per share, a notable 12% above 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. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.

View our latest analysis for Wacker Chemie

Following the latest results, Wacker Chemie's 14 analysts are now forecasting revenues of €5.02b in 2021. This would be a credible 7.0% improvement in sales compared to the last 12 months. Statutory earnings per share are predicted to bounce 207% to €11.68. Yet prior to the latest earnings, the analysts had been anticipated revenues of €5.05b and earnings per share (EPS) of €9.88 in 2021. There was no real change to the revenue estimates, but the analysts do seem more bullish on earnings, given the nice increase in earnings per share expectations following these results.

The consensus price target was unchanged at €122, implying that the improved earnings outlook is not expected to have a long term impact on value creation for shareholders. 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. The most optimistic Wacker Chemie analyst has a price target of €145 per share, while the most pessimistic values it at €90.00. Analysts definitely have varying views on the business, but the spread of estimates is not wide enough in our view to suggest that extreme outcomes could await Wacker Chemie shareholders.

Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. One thing stands out from these estimates, which is that Wacker Chemie is forecast to grow faster in the future than it has in the past, with revenues expected to display 7.0% annualised growth until the end of 2021. If achieved, this would be a much better result than the 0.7% annual decline over the past five years. Compare this against analyst estimates for the broader industry, which suggest that (in aggregate) industry revenues are expected to grow 4.9% annually. So it looks like Wacker Chemie is expected to grow faster than its competitors, at least for a while.

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 Wacker Chemie following these results. Fortunately, they also reconfirmed their revenue numbers, suggesting sales are tracking in line with expectations - and our data suggests that revenues are expected to grow faster 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.

With that in mind, we wouldn't be too quick to come to a conclusion on Wacker Chemie. Long-term earnings power is much more important than next year's profits. At Simply Wall St, we have a full range of analyst estimates for Wacker Chemie going out to 2025, and you can see them free on our platform here..

Before you take the next step you should know about the 2 warning signs for Wacker Chemie that we have uncovered.

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