Earnings Update: Siltronic AG (ETR:WAF) Just Reported Its Annual Results And Analysts Are Updating Their Forecasts

Siltronic AG (ETR:WAF) shareholders are probably feeling a little disappointed, since its shares fell 3.8% to €81.95 in the week after its latest annual results. The result was positive overall - although revenues of €1.5b were in line with what the analysts predicted, Siltronic surprised by delivering a statutory profit of €6.15 per share, modestly greater than expected. 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 gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.

See our latest analysis for Siltronic

Following last week's earnings report, Siltronic's ten analysts are forecasting 2024 revenues to be €1.53b, approximately in line with the last 12 months. The company is forecast to report a statutory loss of €0.61 in 2024, a sharp decline from a profit over the last year. Before this earnings report, the analysts had been forecasting revenues of €1.57b and earnings per share (EPS) of €0.17 in 2024. The analysts have made an abrupt about-face on Siltronic, administering a minor downgrade to to revenue forecasts and slashing the earnings outlook from a profit to loss.

The average price target was broadly unchanged at €90.30, perhaps implicitly signalling that the weaker earnings outlook is not expected to have a long-term impact on the valuation. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. There are some variant perceptions on Siltronic, with the most bullish analyst valuing it at €111 and the most bearish at €55.00 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. We would highlight that Siltronic's revenue growth is expected to slow, with the forecast 0.9% annualised growth rate until the end of 2024 being well below the historical 5.6% p.a. growth over the last five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 8.2% per year. Factoring in the forecast slowdown in growth, it seems obvious that Siltronic is also expected to grow slower than other industry participants.

The Bottom Line

The most important thing to take away is that the analysts are expecting Siltronic to become unprofitable next year. Unfortunately, they also downgraded their revenue estimates, and our data indicates underperformance compared to the wider industry. Even so, earnings per share are more important to the intrinsic value of the business. 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 Siltronic. Long-term earnings power is much more important than next year's profits. We have estimates - from multiple Siltronic analysts - going out to 2026, and you can see them free on our platform here.

Even so, be aware that Siltronic is showing 3 warning signs in our investment analysis , and 2 of those are a bit unpleasant...

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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.