RTL Group S.A. Just Beat EPS By 106%: Here's What Analysts Think Will Happen Next

RTL Group S.A. (ETR:RRTL) last week reported its latest full-year results, which makes it a good time for investors to dive in and see if the business is performing in line with expectations. Revenues were €6.6b, approximately in line with whatthe analysts expected, although statutory earnings per share (EPS) crushed expectations, coming in at €8.41, an impressive 106% ahead of estimates. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.

View our latest analysis for RTL Group

Taking into account the latest results, the most recent consensus for RTL Group from eight analysts is for revenues of €7.47b in 2022 which, if met, would be a decent 13% increase on its sales over the past 12 months. Statutory earnings per share are forecast to plummet 48% to €4.37 in the same period. Yet prior to the latest earnings, the analysts had been anticipated revenues of €7.26b and earnings per share (EPS) of €4.54 in 2022. So it's pretty clear consensus is mixed on RTL Group after the latest results; whilethe analysts lifted revenue numbers, they also administered a minor downgrade to per-share earnings expectations.

There's been no major changes to the price target of €56.20, suggesting that the impact of higher forecast sales and lower earnings won't result in a meaningful change to the business' 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. The most optimistic RTL Group analyst has a price target of €63.00 per share, while the most pessimistic values it at €42.00. 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 RTL Group shareholders.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the RTL Group's past performance and to peers in the same industry. It's clear from the latest estimates that RTL Group's rate of growth is expected to accelerate meaningfully, with the forecast 13% annualised revenue growth to the end of 2022 noticeably faster than its historical growth of 0.1% p.a. over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 6.2% annually. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect RTL Group to grow faster than 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. Pleasantly, they also upgraded their revenue estimates, and their forecasts suggest the business is 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.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have forecasts for RTL Group going out to 2024, and you can see them free on our platform here.

And what about risks? Every company has them, and we've spotted 3 warning signs for RTL Group (of which 1 is potentially serious!) you should know about.

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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.