Sacyr, S.A. (BME:SCYR) Just Released Its Third-Quarter Results And Analysts Are Updating Their Estimates

It's been a good week for Sacyr, S.A. (BME:SCYR) shareholders, because the company has just released its latest third-quarter results, and the shares gained 5.2% to €2.59. It was a pretty good result, with revenues of €1.5b, and Sacyr came in a solid 11% ahead of expectations. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

Our analysis indicates that SCYR is potentially undervalued!

After the latest results, the consensus from Sacyr's eight analysts is for revenues of €5.26b in 2023, which would reflect a noticeable 4.1% decline in sales compared to the last year of performance. Sacyr is also expected to turn profitable, with statutory earnings of €0.19 per share. Before this earnings report, the analysts had been forecasting revenues of €5.14b and earnings per share (EPS) of €0.19 in 2023. So it looks like there's been no major change in sentiment following the latest results, although the analysts have made a modest lift to to revenue forecasts.

It may not be a surprise to see thatthe analysts have reconfirmed their price target of €3.53, implying that the uplift in sales is not expected to greatly contribute to Sacyr's valuation in the near term. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. Currently, the most bullish analyst values Sacyr at €3.85 per share, while the most bearish prices it at €3.12. This is a very narrow spread of estimates, implying either that Sacyr is an easy company to value, or - more likely - the analysts are relying heavily on some key assumptions.

Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. These estimates imply that sales are expected to slow, with a forecast annualised revenue decline of 3.3% by the end of 2023. This indicates a significant reduction from annual growth of 10% over the last five years. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 3.0% per year. It's pretty clear that Sacyr's revenues are expected to perform substantially worse than the wider industry.

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, they also upgraded their revenue estimates, although our data indicates sales are expected to perform worse than the wider industry. The consensus price target held steady at €3.53, with the latest estimates not enough to have an impact on their price targets.

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 estimates - from multiple Sacyr analysts - 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 2 warning signs for Sacyr (of which 1 shouldn't be ignored!) 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.