Earnings Update: Elica S.p.A. (BIT:ELC) Just Reported And Analysts Are Boosting Their Estimates

Shareholders might have noticed that Elica S.p.A. (BIT:ELC) filed its half-yearly result this time last week. The early response was not positive, with shares down 2.9% to €3.31 in the past week. 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 Elica after the latest results.

Check out our latest analysis for Elica

Following the recent earnings report, the consensus from three analysts covering Elica is for revenues of €522.5m in 2021, implying a small 3.6% decline in sales compared to the last 12 months. Statutory earnings per share are forecast to decline 18% to €0.11 in the same period. Yet prior to the latest earnings, the analysts had been anticipated revenues of €497.3m and earnings per share (EPS) of €0.10 in 2021. So it seems there's been a definite increase in optimism about Elica's future following the latest results, with a nice gain to the earnings per share forecasts in particular.

Despite these upgrades,the analysts have not made any major changes to their price target of €4.57, suggesting that the higher estimates are not likely to have a long term impact on what the stock is worth. 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 Elica at €4.80 per share, while the most bearish prices it at €4.40. With such a narrow range of valuations, the analysts apparently share similar views on what they think the business is worth.

Of course, another way to look at these forecasts is to place them into context against the industry itself. These estimates imply that sales are expected to slow, with a forecast annualised revenue decline of 7.0% by the end of 2021. This indicates a significant reduction from annual growth of 1.1% over the last five years. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 5.3% per year. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Elica is expected to lag the wider industry.

The Bottom Line

The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around Elica's earnings potential next year. Fortunately, they also upgraded their revenue estimates, although our data indicates sales 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. At Simply Wall St, we have a full range of analyst estimates for Elica going out to 2023, and you can see them free on our platform here..

Don't forget that there may still be risks. For instance, we've identified 2 warning signs for Elica (1 can't be ignored) you should be aware of.

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This article by Simply Wall St is general in nature. 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.
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