Applus Services, S.A. (BME:APPS) Just Released Its Half-Year Earnings: Here's What Analysts Think

Shareholders might have noticed that Applus Services, S.A. (BME:APPS) filed its half-yearly result this time last week. The early response was not positive, with shares down 3.9% to €8.12 in the past week. 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.

Check out our latest analysis for Applus Services

Taking into account the latest results, the consensus forecast from Applus Services' eleven analysts is for revenues of €1.76b in 2021, which would reflect a reasonable 5.8% improvement in sales compared to the last 12 months. Per-share earnings are expected to surge 77% to €0.32. Before this earnings report, the analysts had been forecasting revenues of €1.74b and earnings per share (EPS) of €0.30 in 2021. The analysts seems to have become more bullish on the business, judging by their new earnings per share estimates.

There's been no major changes to the consensus price target of €11.24, suggesting that the improved earnings per share outlook is not enough to have a long-term positive impact on the stock's 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. There are some variant perceptions on Applus Services, with the most bullish analyst valuing it at €13.65 and the most bearish at €9.00 per share. There are definitely some different views on the stock, but the range of estimates is not wide enough as to imply that the situation is unforecastable, in our view.

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. The analysts are definitely expecting Applus Services' growth to accelerate, with the forecast 12% annualised growth to the end of 2021 ranking favourably alongside historical growth of 0.9% per annum over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 6.0% annually. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect Applus Services to grow faster than the wider industry.

The Bottom Line

The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around Applus Services' earnings potential next year. Happily, there were no major changes to revenue forecasts, with the business still 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.

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. We have forecasts for Applus Services going out to 2023, and you can see them free on our platform here.

Plus, you should also learn about the 3 warning signs we've spotted with Applus Services .

If you decide to trade Applus Services, use the lowest-cost* platform that is rated #1 Overall by Barron’s, Interactive Brokers. Trade stocks, options, futures, forex, bonds and funds on 135 markets, all from a single integrated account. Promoted

This article by Simply Wall St is general in nature. 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.
^*Interactive Brokers Rated Lowest Cost Broker by StockBrokers.com Annual Online Review 2020

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.