Earnings Update: Here's Why Analysts Just Lifted Their Brunello Cucinelli S.p.A. (BIT:BC) Price Target To €110

Brunello Cucinelli S.p.A. (BIT:BC) shareholders are probably feeling a little disappointed, since its shares fell 3.9% to €108 in the week after its latest annual results. It looks like the results were a bit of a negative overall. While revenues of €1.1b were in line with analyst predictions, statutory earnings were less than expected, missing estimates by 2.4% to hit €1.69 per share. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Brunello Cucinelli after the latest results.

See our latest analysis for Brunello Cucinelli

Taking into account the latest results, the consensus forecast from Brunello Cucinelli's eight analysts is for revenues of €1.27b in 2024. This reflects a notable 11% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to grow 11% to €1.88. In the lead-up to this report, the analysts had been modelling revenues of €1.27b and earnings per share (EPS) of €1.94 in 2024. 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 minor downgrade to their earnings per share forecasts.

Despite cutting their earnings forecasts,the analysts have lifted their price target 6.1% to €110, suggesting that these impacts are not expected to weigh on the stock's value in the long term. 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. Currently, the most bullish analyst values Brunello Cucinelli at €133 per share, while the most bearish prices it at €90.00. Analysts definitely have varying views on the business, but the spread of estimates is not wide enough in our view to suggest that extreme outcomes could await Brunello Cucinelli shareholders.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Brunello Cucinelli's past performance and to peers in the same industry. We would highlight that Brunello Cucinelli's revenue growth is expected to slow, with the forecast 11% annualised growth rate until the end of 2024 being well below the historical 16% p.a. growth over the last five years. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 8.3% per year. So it's pretty clear that, while Brunello Cucinelli's revenue growth is expected to slow, it's still expected to grow faster than the industry itself.

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, they also reconfirmed their revenue numbers, suggesting that it's tracking in line with expectations. Additionally, our data suggests that revenue is expected to grow faster 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.

With that in mind, we wouldn't be too quick to come to a conclusion on Brunello Cucinelli. Long-term earnings power is much more important than next year's profits. At Simply Wall St, we have a full range of analyst estimates for Brunello Cucinelli going out to 2026, and you can see them free on our platform here..

It might also be worth considering whether Brunello Cucinelli's debt load is appropriate, using our debt analysis tools on the Simply Wall St platform, 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.