Earnings Miss: Recordati Industria Chimica e Farmaceutica S.p.A. Missed EPS By 31% And Analysts Are Revising Their Forecasts

Shareholders might have noticed that Recordati Industria Chimica e Farmaceutica S.p.A. (BIT:REC) filed its half-year result this time last week. The early response was not positive, with shares down 2.9% to €50.75 in the past week. It looks like a pretty bad result, all things considered. Although revenues of €1.2b were in line with analyst predictions, statutory earnings fell badly short, missing estimates by 31% to hit €0.36 per share. 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. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.

Check out our latest analysis for Recordati Industria Chimica e Farmaceutica

Taking into account the latest results, the most recent consensus for Recordati Industria Chimica e Farmaceutica from eight analysts is for revenues of €2.33b in 2024. If met, it would imply a credible 4.7% increase on its revenue over the past 12 months. Statutory earnings per share are predicted to expand 14% to €2.15. In the lead-up to this report, the analysts had been modelling revenues of €2.30b and earnings per share (EPS) of €2.22 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 small dip in their earnings per share forecasts.

It might be a surprise to learn that the consensus price target was broadly unchanged at €53.09, with the analysts clearly implying that the forecast decline in earnings is not expected to have much of an impact on valuation. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. There are some variant perceptions on Recordati Industria Chimica e Farmaceutica, with the most bullish analyst valuing it at €62.00 and the most bearish at €45.00 per share. This shows there is still a bit of diversity in estimates, but analysts don't appear to be totally split on the stock as though it might be a success or failure situation.

Of course, another way to look at these forecasts is to place them into context against the industry itself. The period to the end of 2024 brings more of the same, according to the analysts, with revenue forecast to display 9.6% growth on an annualised basis. That is in line with its 9.7% annual growth over the past five years. Juxtapose this against our data, which suggests that other companies (with analyst coverage) in the industry are forecast to see their revenues grow 7.8% per year. So although Recordati Industria Chimica e Farmaceutica is expected to maintain its revenue growth rate, it's only growing at about the rate of the wider industry.

The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Recordati Industria Chimica e Farmaceutica. Happily, there were no real changes to revenue forecasts, with the business still expected to grow in line with the overall industry. The consensus price target held steady at €53.09, with the latest estimates not enough to have an impact on their price targets.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. At Simply Wall St, we have a full range of analyst estimates for Recordati Industria Chimica e Farmaceutica going out to 2026, and you can see them free on our platform here..

Plus, you should also learn about the 2 warning signs we've spotted with Recordati Industria Chimica e Farmaceutica .

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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.

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