Results: Avio S.p.A. Exceeded Expectations And The Consensus Has Updated Its Estimates

It's been a good week for Avio S.p.A. (BIT:AVIO) shareholders, because the company has just released its latest full-year results, and the shares gained 6.9% to €9.62. It looks like a credible result overall - although revenues of €344m were what the analysts expected, Avio surprised by delivering a (statutory) profit of €0.25 per share, an impressive 74% above what was forecast. 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. 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 Avio

Following the latest results, Avio's four analysts are now forecasting revenues of €398.9m in 2024. This would be a notable 16% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to expand 19% to €0.31. Yet prior to the latest earnings, the analysts had been anticipated revenues of €411.4m and earnings per share (EPS) of €0.43 in 2024. From this we can that sentiment has definitely become more bearish after the latest results, leading to lower revenue forecasts and a pretty serious reduction to earnings per share estimates.

The analysts made no major changes to their price target of €11.10, suggesting the downgrades are not expected to have a long-term impact on Avio's valuation. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. Currently, the most bullish analyst values Avio at €13.00 per share, while the most bearish prices it at €9.10. This shows there is still a bit of diversity in estimates, but analysts don't appear to be totally split on the stock as though it might be a success or failure situation.

Of course, another way to look at these forecasts is to place them into context against the industry itself. One thing stands out from these estimates, which is that Avio is forecast to grow faster in the future than it has in the past, with revenues expected to display 16% annualised growth until the end of 2024. If achieved, this would be a much better result than the 3.9% annual decline over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in the industry are forecast to see their revenue grow 5.2% per year. Not only are Avio's revenues expected to improve, it seems that the analysts are also expecting it 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 Avio. They also downgraded Avio's revenue estimates, but industry data suggests that it is 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.

Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. We have forecasts for Avio going out to 2026, and you can see them free on our platform here.

We also provide an overview of the Avio Board and CEO remuneration and length of tenure at the company, and whether insiders have been buying the stock, here.

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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.