Earnings Update: Carel Industries S.p.A. (BIT:CRL) Just Reported Its Second-Quarter Results And Analysts Are Updating Their Forecasts

Shareholders might have noticed that Carel Industries S.p.A. (BIT:CRL) filed its second-quarter result this time last week. The early response was not positive, with shares down 6.3% to €15.74 in the past week. Results look mixed - while revenue fell marginally short of analyst estimates at €145m, statutory earnings were in line with expectations, at €0.70 per share. 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. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

Check out our latest analysis for Carel Industries

Following the recent earnings report, the consensus from three analysts covering Carel Industries is for revenues of €599.0m in 2024. This implies a small 2.0% decline in revenue compared to the last 12 months. Statutory earnings per share are expected to decrease 5.7% to €0.49 in the same period. Yet prior to the latest earnings, the analysts had been anticipated revenues of €624.9m and earnings per share (EPS) of €0.56 in 2024. The analysts seem less optimistic after the recent results, reducing their revenue forecasts and making a substantial drop in earnings per share numbers.

Despite the cuts to forecast earnings, there was no real change to the €18.40 price target, showing that the analysts don't think the changes have a meaningful impact on its intrinsic value. 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. The most optimistic Carel Industries analyst has a price target of €19.60 per share, while the most pessimistic values it at €17.00. This is a very narrow spread of estimates, implying either that Carel Industries is an easy company to value, or - more likely - the analysts are relying heavily on some key assumptions.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Carel Industries' past performance and to peers in the same industry. These estimates imply that revenue is expected to slow, with a forecast annualised decline of 4.0% by the end of 2024. This indicates a significant reduction from annual growth of 18% over the last five years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 6.2% annually for the foreseeable future. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Carel Industries 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 Carel Industries. On the negative side, they also downgraded their revenue estimates, and forecasts imply they will perform worse than the wider industry. The consensus price target held steady at €18.40, with the latest estimates not enough to have an impact on their price targets.

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. At Simply Wall St, we have a full range of analyst estimates for Carel Industries going out to 2026, and you can see them free on our platform here..

It is also worth noting that we have found 2 warning signs for Carel Industries 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com