The Fincantieri S.p.A. (BIT:FCT) Interim Results Are Out And Analysts Have Published New Forecasts

The half-year results for Fincantieri S.p.A. (BIT:FCT) were released last week, making it a good time to revisit its performance. 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.

See our latest analysis for Fincantieri

Taking into account the latest results, Fincantieri's five analysts currently expect revenues in 2021 to be €6.71b, approximately in line with the last 12 months. Earnings are expected to improve, with Fincantieri forecast to report a statutory profit of €0.033 per share. In the lead-up to this report, the analysts had been modelling revenues of €6.70b and earnings per share (EPS) of €0.034 in 2021. 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.

It might be a surprise to learn that the consensus price target was broadly unchanged at €0.77, with the analysts clearly implying that the forecast decline in earnings is not expected to have much of an impact on valuation. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. Currently, the most bullish analyst values Fincantieri at €0.93 per share, while the most bearish prices it at €0.64. 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.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Fincantieri's past performance and to peers in the same industry. It's pretty clear that there is an expectation that Fincantieri's revenue growth will slow down substantially, with revenues to the end of 2021 expected to display 0.4% growth on an annualised basis. This is compared to a historical growth rate of 7.8% over the past five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 9.0% per year. Factoring in the forecast slowdown in growth, it seems obvious that Fincantieri is also expected to grow slower than other industry participants.

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 sales are tracking in line with expectations - although our data does suggest that Fincantieri's revenues are 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 said, the long-term trajectory of the company's earnings is a lot more important than next year. We have forecasts for Fincantieri going out to 2023, 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 1 warning sign with Fincantieri , and understanding this should be part of your investment process.

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