Revenue Miss: AXA SA Fell 27% Short Of Analyst Revenue Estimates And Analysts Have Been Revising Their Models

Last week, you might have seen that AXA SA (EPA:CS) released its half-year result to the market. The early response was not positive, with shares down 2.6% to €27.46 in the past week. AXA reported a serious miss, with revenue of €41b falling a huge 27% short of analyst estimates. The bright side is that statutory earnings per share of €2.83 were in line with forecasts. 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.

See our latest analysis for AXA

Following last week's earnings report, AXA's ten analysts are forecasting 2023 revenues to be €103.6b, approximately in line with the last 12 months. Per-share earnings are expected to ascend 16% to €3.37. Yet prior to the latest earnings, the analysts had been anticipated revenues of €104.0b and earnings per share (EPS) of €3.41 in 2023. The consensus analysts don't seem to have seen anything in these results that would have changed their view on the business, given there's been no major change to their estimates.

The analysts reconfirmed their price target of €33.33, showing that the business is executing well and in line with expectations. 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. Currently, the most bullish analyst values AXA at €36.60 per share, while the most bearish prices it at €28.00. Even so, with a relatively close grouping of estimates, it looks like the analysts are quite confident in their valuations, suggesting AXA is an easy business to forecast or the the analysts are all using similar assumptions.

Of course, another way to look at these forecasts is to place them into context against the industry itself. For example, we noticed that AXA's rate of growth is expected to accelerate meaningfully, with revenues forecast to exhibit 3.2% growth to the end of 2023 on an annualised basis. That is well above its historical decline of 2.7% a year over the past five years. Compare this against analyst estimates for the broader industry, which suggest that (in aggregate) industry revenues are expected to grow 6.9% annually for the foreseeable future. Although AXA's revenues are expected to improve, it seems that the analysts are still bearish on the business, forecasting it to grow slower than the broader industry.

The Bottom Line

The most important thing to take away is that there's been no major change in sentiment, with the analysts reconfirming that the business is performing in line with their previous earnings per share estimates. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting that it's tracking in line with expectations. Although our data does suggest that AXA's revenue is expected to perform worse 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.

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 AXA going out to 2025, and you can see them free on our platform here.

Before you take the next step you should know about the 1 warning sign for AXA that we have uncovered.

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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.