Analysts Are Updating Their Vestas Wind Systems A/S (CPH:VWS) Estimates After Its Interim Results

Vestas Wind Systems A/S (CPH:VWS) missed earnings with its latest half-yearly results, disappointing overly-optimistic forecasters. It was a pretty negative result overall, with revenues of €6.0b missing analyst predictions by 7.0%. Worse, the business reported a statutory loss of €0.23 per share, much larger than the analysts had forecast prior to the result. 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.

See our latest analysis for Vestas Wind Systems

Taking into account the latest results, the current consensus from Vestas Wind Systems' 25 analysts is for revenues of €17.1b in 2024. This would reflect a decent 13% increase on its revenue over the past 12 months. Earnings are expected to improve, with Vestas Wind Systems forecast to report a statutory profit of €0.51 per share. Yet prior to the latest earnings, the analysts had been anticipated revenues of €17.1b and earnings per share (EPS) of €0.56 in 2024. 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 small dip in their earnings per share forecasts.

It might be a surprise to learn that the consensus price target was broadly unchanged at kr.214, with the analysts clearly implying that the forecast decline in earnings is not expected to have much of an impact on valuation. 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 Vestas Wind Systems analyst has a price target of kr.300 per share, while the most pessimistic values it at kr.99.05. With such a wide range in price targets, analysts are almost certainly betting on widely divergent outcomes in the underlying business. With this in mind, we wouldn't rely too heavily the consensus price target, as it is just an average and analysts clearly have some deeply divergent views on the business.

Of course, another way to look at these forecasts is to place them into context against the industry itself. The analysts are definitely expecting Vestas Wind Systems' growth to accelerate, with the forecast 28% annualised growth to the end of 2024 ranking favourably alongside historical growth of 5.1% per annum over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 7.2% annually. Factoring in the forecast acceleration in revenue, it's pretty clear that Vestas Wind Systems is expected to grow much faster than its industry.

The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Vestas Wind Systems. Happily, there were no major changes to revenue forecasts, with the business still expected to grow faster than the wider industry. The consensus price target held steady at kr.214, with the latest estimates not enough to have an impact on their price targets.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have estimates - from multiple Vestas Wind Systems analysts - going out to 2026, and you can see them free on our platform here.

It might also be worth considering whether Vestas Wind Systems' debt load is appropriate, using our debt analysis tools on the Simply Wall St platform, here.

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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.