Biesse S.p.A. (BIT:BSS) Consensus Forecasts Have Become A Little Darker Since Its Latest Report

Last week, you might have seen that Biesse S.p.A. (BIT:BSS) released its annual result to the market. The early response was not positive, with shares down 5.4% to €21.62 in the past week. The results were positive, with revenue coming in at €598m, beating analyst expectations by 7.7%. 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 Biesse after the latest results.

See our latest analysis for Biesse

Taking into account the latest results, the most recent consensus for Biesse from three analysts is for revenues of €625.1m in 2021 which, if met, would be a credible 4.6% increase on its sales over the past 12 months. Per-share earnings are expected to leap 400% to €0.73. Before this earnings report, the analysts had been forecasting revenues of €662.6m and earnings per share (EPS) of €0.89 in 2021. From this we can that sentiment has definitely become more bearish after the latest results, leading to lower revenue forecasts and a real cut to earnings per share estimates.

The average price target climbed 18% to €25.20despite the reduced earnings forecasts, suggesting that this earnings impact could be a positive for the stock, once it passes. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. There are some variant perceptions on Biesse, with the most bullish analyst valuing it at €27.00 and the most bearish at €18.00 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.

Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. We can infer from the latest estimates that forecasts expect a continuation of Biesse'shistorical trends, as the 4.6% annualised revenue growth to the end of 2021 is roughly in line with the 4.3% annual revenue growth over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenues grow 8.0% per year. So it's pretty clear that Biesse is expected to grow slower than similar companies in the same industry.

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 revenues will perform worse than the wider industry. We note an upgrade to the price target, suggesting that the analysts believes the intrinsic value of the business is likely to improve over time.

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 Biesse going out to 2024, and you can see them free on our platform here.

Don't forget that there may still be risks. For instance, we've identified 3 warning signs for Biesse that you should be aware of.

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This article by Simply Wall St is general in nature. 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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