It’s been a sad week for Aquafil S.p.A. (BIT:ECNL), who’ve watched their investment drop 14% to €5.98 in the week since the company reported its half-year result. Aquafil reported €287m in revenue, roughly in line with analyst forecasts, although earnings per share (EPS) of €0.59 beat expectations, being 6.5% higher than what analysts expected. Earnings are an important time for investors, as they can track a company’s performance, look at what top analysts are forecasting for next year, and see if there’s been a change in sentiment towards the company. We thought readers would find it interesting to see analysts’ latest post-earnings forecasts for next year.
Following last week’s earnings report, Aquafil’s only analyst are forecasting 2019 revenues to be €555.0m, approximately in line with the last 12 months. Yet prior to the latest earnings, analysts had been forecasting revenues of €577.9m and earnings per share (EPS) of €0.40 in 2019. Overall, while there’s been a minor downgrade to revenue estimates, the consensus now no longer provides an EPS estimate, suggesting that the market believes revenue is more important following the latest results.
The average analyst price target fell 7.4% to €12.50, with analysts clearly having become less optimistic about Aquafil’s prospects following its latest earnings.
Zooming out to look at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up both against past performance, and against industry growth estimates. It’s pretty clear that analysts expect Aquafil’s revenue growth will slow down substantially, with revenues next year expected to grow 1.8%, compared to a historical growth rate of 2.9% over the past five years. By way of comparison, other companies in this market with analyst coverage, are forecast to grow their revenue at 7.3% per year. Factoring in the forecast slowdown in growth, it seems obvious that analysts still expect Aquafil to grow slower than the wider market.
The Bottom Line
The biggest highlight of the new consensus is that analysts have reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Aquafil. On the negative side, they also downgraded their revenue estimates, and forecasts imply revenues will perform worse than the wider market. Analysts also downgraded their price target, suggesting that the latest news has led analysts to become more pessimistic about the intrinsic value of the business.
One Aquafil broker/analyst has provided estimates out to 2021, which can be seen for free on our platform here.
You can also see whether Aquafil is carrying too much debt, and whether its balance sheet is healthy, for free on our platform here.
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