Earnings Update: Here's Why Analysts Just Lifted Their Técnicas Reunidas, S.A. (BME:TRE) Price Target To €16.42

Last week, you might have seen that Técnicas Reunidas, S.A. (BME:TRE) released its second-quarter result to the market. The early response was not positive, with shares down 6.7% to €11.16 in the past week. Overall the results were a little better than the analysts were expecting, with revenues beating forecasts by 7.0%to hit €1.1b. 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. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.

View our latest analysis for Técnicas Reunidas

Taking into account the latest results, the most recent consensus for Técnicas Reunidas from six analysts is for revenues of €4.49b in 2024. If met, it would imply a decent 11% increase on its revenue over the past 12 months. Statutory earnings per share are predicted to surge 69% to €1.35. In the lead-up to this report, the analysts had been modelling revenues of €4.51b and earnings per share (EPS) of €1.36 in 2024. 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.

With the analysts reconfirming their revenue and earnings forecasts, it's surprising to see that the price target rose 9.8% to €16.42. It looks as though they previously had some doubts over whether the business would live up to their expectations. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. There are some variant perceptions on Técnicas Reunidas, with the most bullish analyst valuing it at €20.50 and the most bearish at €10.50 per share. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the business.

Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. For example, we noticed that Técnicas Reunidas' rate of growth is expected to accelerate meaningfully, with revenues forecast to exhibit 22% growth to the end of 2024 on an annualised basis. That is well above its historical decline of 0.9% a year over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in the industry are forecast to see their revenue grow 4.4% per year. Not only are Técnicas Reunidas' revenues expected to improve, it seems that the analysts are also expecting it to grow faster 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 reconfirmed their revenue numbers, suggesting that it's tracking in line with expectations. Additionally, our data suggests that revenue is expected to grow faster than the wider industry. There was also a nice increase in the price target, with the analysts clearly feeling that the intrinsic value of the business is improving.

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 Técnicas Reunidas going out to 2026, and you can see them free on our platform here.

It is also worth noting that we have found 1 warning sign for Técnicas Reunidas that you need to take into consideration.

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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.

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