Analyst Estimates: Here's What Brokers Think Of Nacon S.A. (EPA:NACON) After Its Yearly Report

By
Simply Wall St
Published
June 02, 2021
ENXTPA:NACON
Source: Shutterstock

Last week, you might have seen that Nacon S.A. (EPA:NACON) released its annual result to the market. The early response was not positive, with shares down 3.3% to €6.55 in the past week. Overall the results were a little better than the analysts were expecting, with revenues beating forecasts by 6.0%to hit €178m. 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.

See our latest analysis for Nacon

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ENXTPA:NACON Earnings and Revenue Growth June 3rd 2021

After the latest results, the three analysts covering Nacon are now predicting revenues of €196.8m in 2022. If met, this would reflect a solid 11% improvement in sales compared to the last 12 months. Per-share earnings are expected to jump 40% to €0.30. Yet prior to the latest earnings, the analysts had been anticipated revenues of €196.1m and earnings per share (EPS) of €0.32 in 2022. The analysts seem to have become a little more negative on the business after the latest results, given the small dip in their earnings per share numbers for next year.

It might be a surprise to learn that the consensus price target was broadly unchanged at €9.63, with the analysts clearly implying that the forecast decline in earnings is not expected to have much of an impact on valuation. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. The most optimistic Nacon analyst has a price target of €10.50 per share, while the most pessimistic values it at €9.00. With such a narrow range of valuations, the analysts apparently share similar views on what they think the business is worth.

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. We would highlight that Nacon's revenue growth is expected to slow, with the forecast 11% annualised growth rate until the end of 2022 being well below the historical 37% growth over the last year. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 5.8% per year. Even after the forecast slowdown in growth, it seems obvious that Nacon is also expected to grow faster than the wider industry.

The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Nacon. 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 in mind, we wouldn't be too quick to come to a conclusion on Nacon. Long-term earnings power is much more important than next year's profits. At Simply Wall St, we have a full range of analyst estimates for Nacon going out to 2026, and you can see them free on our platform here..

Another thing to consider is whether management and directors have been buying or selling stock recently. We provide an overview of all open market stock trades for the last twelve months on our platform, here.

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