It's been a mediocre week for ACS, Actividades de Construcción y Servicios, S.A. (BME:ACS) shareholders, with the stock dropping 11% to €20.40 in the week since its latest third-quarter results. Results look mixed - while revenue fell marginally short of analyst estimates at €8.9b, statutory earnings beat expectations 9.5%, with ACS Actividades de Construcción y Servicios reporting profits of €0.40 per share. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.
Taking into account the latest results, the current consensus from ACS Actividades de Construcción y Servicios' 14 analysts is for revenues of €38.6b in 2021, which would reflect a modest 2.8% increase on its sales over the past 12 months. Statutory per-share earnings are expected to be €2.66, roughly flat on the last 12 months. Before this earnings report, the analysts had been forecasting revenues of €38.7b and earnings per share (EPS) of €2.68 in 2021. So it's pretty clear that, although the analysts have updated their estimates, there's been no major change in expectations for the business following the latest results.
It will come as no surprise then, to learn that the consensus price target is largely unchanged at €30.25. 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. Currently, the most bullish analyst values ACS Actividades de Construcción y Servicios at €40.00 per share, while the most bearish prices it at €10.42. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the business.
Of course, another way to look at these forecasts is to place them into context against the industry itself. We would highlight that ACS Actividades de Construcción y Servicios' revenue growth is expected to slow, with forecast 2.8% increase next year well below the historical 4.3%p.a. growth over the last five years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 4.6% next year. So it's pretty clear that, while revenue growth is expected to slow down, the wider industry is also expected to grow faster than ACS Actividades de Construcción y Servicios.
The Bottom Line
The most obvious conclusion is that there's been no major change in the business' prospects in recent times, with the analysts holding their earnings forecasts steady, in line with previous estimates. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting sales are tracking in line with expectations - although our data does suggest that ACS Actividades de Construcción y Servicios' revenues are expected to perform worse than the wider industry. The consensus price target held steady at €30.25, with the latest estimates not enough to have an impact on their price targets.
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 ACS Actividades de Construcción y Servicios going out to 2023, and you can see them free on our platform here..
Plus, you should also learn about the 4 warning signs we've spotted with ACS Actividades de Construcción y Servicios (including 1 which is significant) .
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