Hera S.p.A. Just Beat Revenue Estimates By 24%

Last week saw the newest quarterly earnings release from Hera S.p.A. (BIT:HER), an important milestone in the company's journey to build a stronger business. Revenue of €4.4b came in a notable 24% ahead of expectations, while statutory earnings of €0.34 were in line with what the analysts had been forecasting. 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 thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

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Following last week's earnings report, Hera's three analysts are forecasting 2025 revenues to be €13.9b, approximately in line with the last 12 months. Statutory earnings per share are forecast to fall 10% to €0.32 in the same period. In the lead-up to this report, the analysts had been modelling revenues of €13.0b and earnings per share (EPS) of €0.32 in 2025. So it looks like there's been no major change in sentiment following the latest results, although the analysts have made a small lift in to revenue forecasts.

Check out our latest analysis for Hera

Even though revenue forecasts increased, there was no change to the consensus price target of €4.18, suggesting the analysts are focused on earnings as the driver of value creation. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. Currently, the most bullish analyst values Hera at €4.30 per share, while the most bearish prices it at €4.00. With such a narrow range of valuations, the analysts apparently share similar views on what they think the business is worth.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Hera's past performance and to peers in the same industry. We would highlight that revenue is expected to reverse, with a forecast 1.1% annualised decline to the end of 2025. That is a notable change from historical growth of 14% over the last five years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 4.0% annually for the foreseeable future. It's pretty clear that Hera's revenues are expected to perform substantially worse than the wider industry.

The Bottom Line

The most obvious conclusion is that there's been no major change in the business' prospects in recent times, with the analysts holding their earnings forecasts steady, in line with previous estimates. Fortunately, they also upgraded their revenue estimates, although our data indicates it is expected to perform worse than the wider industry. The consensus price target held steady at €4.18, 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. We have estimates - from multiple Hera analysts - going out to 2027, and you can see them free on our platform here.

You should always think about risks though. Case in point, we've spotted 2 warning signs for Hera you should be aware of, and 1 of them is significant.

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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.