Earnings Miss: Avio S.p.A. Missed EPS By 16% And Analysts Are Revising Their Forecasts

It's been a good week for Avio S.p.A. (BIT:AVIO) shareholders, because the company has just released its latest annual results, and the shares gained 5.9% to €19.30. Revenues hit €480m, beating expectations by a remarkable 25%. Statutory earnings per share (EPS) came up short, with EPS of €0.23 missing forecasts by 16%. 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 thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

See our latest analysis for Avio

Following last week's earnings report, Avio's three analysts are forecasting 2025 revenues to be €474.5m, approximately in line with the last 12 months. Per-share earnings are expected to soar 43% to €0.34. In the lead-up to this report, the analysts had been modelling revenues of €431.3m and earnings per share (EPS) of €0.44 in 2025. Although revenues are expected to increase meaningfully, the analysts have acknowledged the cost of growth, given the pretty serious reduction to EPS estimates following the latest report.

The analysts also upgraded Avio's price target 13% to €18.20, implying that the higher revenue expected to generate enough value to offset the forecast decline in earnings. 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 Avio at €21.00 per share, while the most bearish prices it at €14.30. As you can see, analysts are not all in agreement on the stock's future, but the range of estimates is still reasonably narrow, which could suggest that the outcome is not totally unpredictable.

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 revenue is expected to reverse, with a forecast 1.2% annualised decline to the end of 2025. That is a notable change from historical growth of 3.5% over the last five years. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 11% per year. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Avio is expected to lag 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 Avio. They also upgraded their revenue estimates for next year, even though it is expected to grow slower than the wider industry. There was also a nice increase in the price target, with the analysts clearly feeling that the intrinsic value of the business is improving.

With that in mind, we wouldn't be too quick to come to a conclusion on Avio. Long-term earnings power is much more important than next year's profits. We have forecasts for Avio going out to 2027, and you can see them free on our platform here.

That said, it's still necessary to consider the ever-present spectre of investment risk. We've identified 2 warning signs with Avio , and understanding these should be part of your investment process.

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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.