Brembo N.V. (BIT:BRE) Just Released Its First-Quarter Earnings: Here's What Analysts Think

Last week, you might have seen that Brembo N.V. (BIT:BRE) released its quarterly result to the market. The early response was not positive, with shares down 7.3% to €11.15 in the past week. It was a credible result overall, with revenues of €1.0b and statutory earnings per share of €0.94 both in line with analyst estimates, showing that Brembo is executing in line with expectations. 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. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Brembo after the latest results.

View our latest analysis for Brembo

Taking into account the latest results, Brembo's six analysts currently expect revenues in 2024 to be €3.98b, approximately in line with the last 12 months. Statutory per-share earnings are expected to be €0.94, roughly flat on the last 12 months. Yet prior to the latest earnings, the analysts had been anticipated revenues of €4.04b and earnings per share (EPS) of €0.97 in 2024. 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 €13.53, 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 Brembo, with the most bullish analyst valuing it at €17.00 and the most bearish at €10.00 per share. 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.

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 Brembo's revenue growth is expected to slow, with the forecast 1.9% annualised growth rate until the end of 2024 being well below the historical 11% 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 2.6% 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 Brembo.

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. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting that it's tracking in line with expectations. Although our data does suggest that Brembo'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.

With that in mind, we wouldn't be too quick to come to a conclusion on Brembo. 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 Brembo going out to 2026, and you can see them free on our platform here..

It is also worth noting that we have found 1 warning sign for Brembo that you need to take into consideration.

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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.