Aena S.M.E., S.A. (BME:AENA) shareholders are probably feeling a little disappointed, since its shares fell 7.8% to €116 in the week after its latest third-quarter results. In addition to smashing expectations with revenues of €621m, Aena S.M.E delivered a surprise statutory profit of €0.42 per share, a notable improvement compared to analyst expectations of a loss. 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 gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.
After the latest results, the 17 analysts covering Aena S.M.E are now predicting revenues of €3.33b in 2021. If met, this would reflect a substantial 21% improvement in sales compared to the last 12 months. Per-share earnings are expected to bounce 169% to €3.96. Yet prior to the latest earnings, the analysts had been anticipated revenues of €3.40b and earnings per share (EPS) of €4.29 in 2021. It's pretty clear that pessimism has reared its head after the latest results, leading to a weaker revenue outlook and a small dip in earnings per share estimates.
Despite the cuts to forecast earnings, there was no real change to the €132 price target, showing that the analysts don't think the changes have a meaningful impact on its intrinsic value. 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. Currently, the most bullish analyst values Aena S.M.E at €163 per share, while the most bearish prices it at €92.10. 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.
These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Aena S.M.E's past performance and to peers in the same industry. It's clear from the latest estimates that Aena S.M.E's rate of growth is expected to accelerate meaningfully, with the forecast 21% revenue growth noticeably faster than its historical growth of 2.3%p.a. over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 14% next year. Factoring in the forecast acceleration in revenue, it's pretty clear that Aena S.M.E is expected to grow much faster than its industry.
The Bottom Line
The most important thing to take away is that the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. They also downgraded their revenue estimates, although industry data suggests that Aena S.M.E's revenues are expected to grow faster than the wider industry. The consensus price target held steady at €132, with the latest estimates not enough to have an impact on their price targets.
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. At Simply Wall St, we have a full range of analyst estimates for Aena S.M.E going out to 2024, and you can see them free on our platform here..
However, before you get too enthused, we've discovered 4 warning signs for Aena S.M.E (1 is a bit unpleasant!) that you should be aware of.
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