Iveco Group N.V. Just Beat Earnings Expectations: Here's What Analysts Think Will Happen Next

Iveco Group N.V. (BIT:IVG) just released its half-year report and things are looking bullish. Iveco Group beat earnings, with revenues hitting €6.4b, ahead of expectations, and statutory earnings per share outperforming analyst reckonings by a solid 16%. 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 Iveco Group after the latest results.

Check out our latest analysis for Iveco Group

Taking into account the latest results, the current consensus from Iveco Group's eight analysts is for revenues of €13.1b in 2022, which would reflect a modest 2.5% increase on its sales over the past 12 months. Earnings are expected to improve, with Iveco Group forecast to report a statutory profit of €0.41 per share. Before this earnings report, the analysts had been forecasting revenues of €12.9b and earnings per share (EPS) of €0.47 in 2022. The analysts seem to have become more bearish following the latest results. While there were no changes to revenue forecasts, there was a real cut to EPS estimates.

The consensus price target held steady at €8.61, with the analysts seemingly voting that their lower forecast earnings are not expected to lead to a lower stock price in the foreseeable future. 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 Iveco Group, with the most bullish analyst valuing it at €13.00 and the most bearish at €5.15 per share. Note the wide gap in analyst price targets? This implies to us that there is a fairly broad range of possible scenarios for the underlying business.

Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. The analysts are definitely expecting Iveco Group's growth to accelerate, with the forecast 5.1% annualised growth to the end of 2022 ranking favourably alongside historical growth of 3.2% per annum over the past year. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 7.3% per year. So it's clear that despite the acceleration in growth, Iveco Group is expected to grow meaningfully slower than the industry average.

The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Iveco Group. On the plus side, there were no major changes to revenue estimates; although forecasts imply revenues will 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 estimates - from multiple Iveco Group analysts - going out to 2024, 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 Iveco Group (at least 1 which is significant) , and understanding them 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.