Sartorius Stedim Biotech S.A. Just Missed Earnings - But Analysts Have Updated Their Models

It's been a sad week for Sartorius Stedim Biotech S.A. (EPA:DIM), who've watched their investment drop 13% to €147 in the week since the company reported its interim result. It looks like a pretty bad result, all things considered. Although revenues of €1.4b were in line with analyst predictions, statutory earnings fell badly short, missing estimates by 35% to hit €0.50 per share. 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. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.

Check out our latest analysis for Sartorius Stedim Biotech

After the latest results, the nine analysts covering Sartorius Stedim Biotech are now predicting revenues of €2.83b in 2024. If met, this would reflect a satisfactory 2.9% improvement in revenue compared to the last 12 months. Per-share earnings are expected to jump 68% to €2.92. In the lead-up to this report, the analysts had been modelling revenues of €2.92b and earnings per share (EPS) of €3.40 in 2024. From this we can that sentiment has definitely become more bearish after the latest results, leading to lower revenue forecasts and a substantial drop in earnings per share estimates.

Despite the cuts to forecast earnings, there was no real change to the €231 price target, showing that the analysts don't think the changes have a meaningful impact on its intrinsic value. 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 Sartorius Stedim Biotech, with the most bullish analyst valuing it at €360 and the most bearish at €175 per share. Note the wide gap in analyst price targets? This implies to us that there is a fairly broad range of possible scenarios for the underlying business.

One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. We would highlight that Sartorius Stedim Biotech's revenue growth is expected to slow, with the forecast 5.8% annualised growth rate until the end of 2024 being well below the historical 16% p.a. growth over the last five years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 11% annually. So it's pretty clear that, while revenue growth is expected to slow down, the wider industry is also expected to grow faster than Sartorius Stedim Biotech.

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. On the negative side, they also downgraded their revenue estimates, and forecasts imply they will 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 Sartorius Stedim Biotech going out to 2026, and you can see them free on our platform here.

Before you take the next step you should know about the 5 warning signs for Sartorius Stedim Biotech (1 is potentially serious!) 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.

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