Reply S.p.A. (BIT:REY) Just Reported And Analysts Have Been Lifting Their Price Targets

It's been a good week for Reply S.p.A. (BIT:REY) shareholders, because the company has just released its latest full-year results, and the shares gained 8.2% to €103. It was an okay report, and revenues came in at €1.3b, 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. 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 Reply

Following the latest results, Reply's five analysts are now forecasting revenues of €1.44b in 2021. This would be a decent 15% improvement in sales compared to the last 12 months. Per-share earnings are expected to expand 11% to €3.52. In the lead-up to this report, the analysts had been modelling revenues of €1.39b and earnings per share (EPS) of €3.40 in 2021. It looks like there's been a modest increase in sentiment following the latest results, withthe analysts becoming a bit more optimistic in their predictions for both revenues and earnings.

It will come as no surprise to learn that the analysts have increased their price target for Reply 9.3% to €111on the back of these upgrades. 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. The most optimistic Reply analyst has a price target of €125 per share, while the most pessimistic values it at €94.00. With such a narrow range of valuations, the analysts apparently share similar views on what they think the business is worth.

Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. The analysts are definitely expecting Reply's growth to accelerate, with the forecast 15% annualised growth to the end of 2021 ranking favourably alongside historical growth of 12% per annum over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue shrink 2.1% per year. It seems obvious that as part of the brighter growth outlook, Reply is expected to grow faster than 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 Reply's earnings potential next year. Fortunately, they also upgraded their revenue estimates, and our data indicates sales are expected to perform better than the wider industry. There was also a nice increase in the price target, with the analysts clearly feeling that the intrinsic value of the business is improving.

With that in mind, we wouldn't be too quick to come to a conclusion on Reply. 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 Reply going out to 2025, and you can see them free on our platform here..

You can also see our analysis of Reply's Board and CEO remuneration and experience, and whether company insiders have been buying stock.

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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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