Atresmedia Corporación de Medios de Comunicación, S.A. Just Missed Earnings - But Analysts Have Updated Their Models

Investors in Atresmedia Corporación de Medios de Comunicación, S.A. (BME:A3M) had a good week, as its shares rose 2.1% to close at €3.45 following the release of its annual results. It looks like a pretty bad result, all things considered. Although revenues of €866m were in line with analyst predictions, statutory earnings fell badly short, missing estimates by 56% to hit €0.11 per share. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

Check out our latest analysis for Atresmedia Corporación de Medios de Comunicación

Following the latest results, Atresmedia Corporación de Medios de Comunicación's 14 analysts are now forecasting revenues of €927.4m in 2021. This would be a satisfactory 7.0% improvement in sales compared to the last 12 months. Statutory earnings per share are predicted to leap 258% to €0.38. Yet prior to the latest earnings, the analysts had been anticipated revenues of €936.9m and earnings per share (EPS) of €0.40 in 2021. So it looks like there's been a small decline in overall sentiment after the recent results - there's been no major change to revenue estimates, but the analysts did make a small dip in their earnings per share forecasts.

The consensus price target held steady at €3.37, with the analysts seemingly voting that their lower forecast earnings are not expected to lead to a lower stock price in the foreseeable future. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. There are some variant perceptions on Atresmedia Corporación de Medios de Comunicación, with the most bullish analyst valuing it at €6.30 and the most bearish at €2.00 per share. So we wouldn't be assigning too much credibility to analyst price targets in this case, because there are clearly some widely different views on what kind of performance this business can generate. As a result it might not be a great idea to make decisions based on the consensus price target, which is after all just an average of this wide range of estimates.

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. One thing stands out from these estimates, which is that Atresmedia Corporación de Medios de Comunicación is forecast to grow faster in the future than it has in the past, with revenues expected to grow 7.0%. If achieved, this would be a much better result than the 1.5% annual decline over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenue grow 6.1% per year. So while Atresmedia Corporación de Medios de Comunicación's revenues are expected to improve, it seems that it is expected to grow at about the same rate as the overall industry.

The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Atresmedia Corporación de Medios de Comunicación. Happily, there were no real changes to sales forecasts, with the business still expected to grow in line with the overall industry. The consensus price target held steady at €3.37, 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 forecasts for Atresmedia Corporación de Medios de Comunicación going out to 2023, and you can see them free on our platform here.

And what about risks? Every company has them, and we've spotted 3 warning signs for Atresmedia Corporación de Medios de Comunicación you should know about.

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