Siemens Gamesa Renewable Energy, S.A. (BME:SGRE) Just Reported Full-Year Earnings: Have Analysts Changed Their Mind On The Stock?

Siemens Gamesa Renewable Energy, S.A. (BME:SGRE) missed earnings with its latest full-year results, disappointing overly-optimistic forecasters. It was a pretty negative result overall, with revenues of €9.5b missing analyst predictions by 2.2%. Additionally, the business reported a statutory loss of €1.35 per share, 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. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.

See our latest analysis for Siemens Gamesa Renewable Energy

Taking into account the latest results, the current consensus from Siemens Gamesa Renewable Energy's 19 analysts is for revenues of €10.6b in 2021, which would reflect a decent 12% increase on its sales over the past 12 months. Losses are predicted to fall substantially, shrinking 91% to €0.12. Before this earnings announcement, the analysts had been modelling revenues of €10.6b and losses of €0.10 per share in 2021. So it's pretty clear the analysts have mixed opinions on Siemens Gamesa Renewable Energy even after this update; although they reconfirmed their revenue numbers, it came at the cost of a per-share losses.

As a result, there was no major change to the consensus price target of €22.66, with the analysts implicitly confirming that the business looks to be performing in line with expectations, despite higher forecast losses. 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 Siemens Gamesa Renewable Energy, with the most bullish analyst valuing it at €29.50 and the most bearish at €12.30 per share. 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. The analysts are definitely expecting Siemens Gamesa Renewable Energy's growth to accelerate, with the forecast 12% growth ranking favourably alongside historical growth of 3.5% per annum over the past three years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 6.9% per year. Factoring in the forecast acceleration in revenue, it's pretty clear that Siemens Gamesa Renewable Energy is expected to grow much faster than its industry.

The Bottom Line

The most important thing to take away is that the analysts increased their loss per share estimates for next year. Fortunately, they also reconfirmed their revenue numbers, suggesting sales are tracking in line with expectations - and our data suggests that revenues are 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.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have forecasts for Siemens Gamesa Renewable Energy going out to 2025, and you can see them free on our platform here.

However, before you get too enthused, we've discovered 1 warning sign for Siemens Gamesa Renewable Energy that you should be aware of.

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