RCS MediaGroup S.p.A. (BIT:RCS) Analysts Are Pretty Bullish On The Stock After Recent Results

It's been a pretty great week for RCS MediaGroup S.p.A. (BIT:RCS) shareholders, with its shares surging 13% to €0.72 in the week since its latest annual results. It was an okay report, and revenues came in at €750m, approximately in line with analyst estimates leading up to the results announcement. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.

Check out our latest analysis for RCS MediaGroup

Taking into account the latest results, RCS MediaGroup's two analysts currently expect revenues in 2021 to be €761.4m, approximately in line with the last 12 months. Statutory earnings per share are predicted to bounce 163% to €0.075. In the lead-up to this report, the analysts had been modelling revenues of €789.7m and earnings per share (EPS) of €0.076 in 2021. So it looks like the analysts have become a bit less optimistic after the latest results announcement, with revenues expected to fall even as the company is supposed to maintain EPS.

The consensus price target rose 6.4% to €0.67, with the analysts apparently satisfied with the business performance despite lower revenue forecasts.

Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. From these estimates it looks as though the analysts expect the years of declining sales to come to an end, given the flat revenue forecast out to 2021. That would be a definite improvement, given that the past five years have seen sales shrink 4.5% annually. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenue grow 3.4% per year. So it's pretty clear that, although revenues are improving, RCS MediaGroup is still expected to grow slower than the industry.

The Bottom Line

The most important thing to take away is that there's been no major change in sentiment, with the analysts reconfirming that the business is performing in line with their previous earnings per share estimates. Unfortunately, they also downgraded their revenue estimates, and our data indicates revenues are expected to perform worse than the wider industry. Even so, earnings per share are more important to the intrinsic value of the business. Still, earnings are more important to the intrinsic value of the business. 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 RCS MediaGroup. Long-term earnings power is much more important than next year's profits. At least one analyst has provided forecasts out to 2023, which can be seen for free on our platform here.

Even so, be aware that RCS MediaGroup is showing 3 warning signs in our investment analysis , you should know about...

If you’re looking to trade RCS MediaGroup, open an account with the lowest-cost* platform trusted by professionals, Interactive Brokers. Their clients from over 200 countries and territories trade stocks, options, futures, forex, bonds and funds worldwide from a single integrated account. Promoted

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.
^*Interactive Brokers Rated Lowest Cost Broker by StockBrokers.com Annual Online Review 2020

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.