Axtel, S.A.B. de C.V. (BMV:AXTELCPO) Just Reported Earnings, And Analysts Cut Their Target Price

By
Simply Wall St
Published
February 18, 2022
BMV:AXTEL CPO
Source: Shutterstock

Axtel, S.A.B. de C.V. (BMV:AXTELCPO) came out with its full-year results last week, and we wanted to see how the business is performing and what industry forecasters think of the company following this report. It was an okay report, and revenues came in at Mex$11b, approximately in line with analyst estimates leading up to the results announcement. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.

See our latest analysis for Axtel. de

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BMV:AXTEL CPO Earnings and Revenue Growth February 18th 2022

Taking into account the latest results, Axtel. de's dual analysts currently expect revenues in 2022 to be Mex$11.3b, approximately in line with the last 12 months. Earnings are expected to improve, with Axtel. de forecast to report a statutory profit of Mex$0.09 per share. Before this earnings report, the analysts had been forecasting revenues of Mex$11.6b and earnings per share (EPS) of Mex$0.089 in 2022. 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.

It will come as no surprise then, that the consensus price target fell 17% to Mex$7.77following these changes.

Of course, another way to look at these forecasts is to place them into context against the industry itself. We would also point out that the forecast 0.6% annualised revenue decline to the end of 2022 is better than the historical trend, which saw revenues shrink 3.4% annually over the past five years By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenue grow 5.8% per year. So while a broad number of companies are forecast to grow, unfortunately Axtel. de is expected to see its sales affected worse than other companies in the 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. On the negative side, they also downgraded their revenue estimates, and forecasts imply revenues will perform worse than the wider industry. Even so, earnings are more important to the intrinsic value of the business. The consensus price target fell measurably, with the analysts seemingly not reassured by the latest results, leading to a lower estimate of Axtel. de's future valuation.

With that in mind, we wouldn't be too quick to come to a conclusion on Axtel. de. Long-term earnings power is much more important than next year's profits. We have analyst estimates for Axtel. de going out as far as 2024, and you can see them free on our platform here.

You can also see whether Axtel. de is carrying too much debt, and whether its balance sheet is healthy, for free on our platform here.

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