Earnings Beat: Arcadis NV Just Beat Analyst Forecasts, And Analysts Have Been Updating Their Models

It's been a good week for Arcadis NV (AMS:ARCAD) shareholders, because the company has just released its latest yearly results, and the shares gained 6.1% to €41.74. Revenues were €3.4b, approximately in line with expectations, although statutory earnings per share (EPS) performed substantially better. EPS of €1.87 were also better than expected, beating analyst predictions by 10%. 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. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

Check out our latest analysis for Arcadis

After the latest results, the two analysts covering Arcadis are now predicting revenues of €3.52b in 2022. If met, this would reflect a reasonable 4.2% improvement in sales compared to the last 12 months. Statutory earnings per share are predicted to accumulate 6.0% to €2.00. Yet prior to the latest earnings, the analysts had been anticipated revenues of €3.49b and earnings per share (EPS) of €1.99 in 2022. So it's pretty clear that, although the analysts have updated their estimates, there's been no major change in expectations for the business following the latest results.

The consensus price target rose 16% to €49.50despite there being no meaningful change to earnings estimates. It could be that the analystsare reflecting the predictability of Arcadis' earnings by assigning a price premium.

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. It's clear from the latest estimates that Arcadis' rate of growth is expected to accelerate meaningfully, with the forecast 4.2% annualised revenue growth to the end of 2022 noticeably faster than its historical growth of 0.7% p.a. over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 4.4% annually. Arcadis is expected to grow at about the same rate as its industry, so it's not clear that we can draw any conclusions from its growth relative to competitors.

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. Happily, there were no real changes to sales forecasts, with the business still expected to grow in line with the overall industry. 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.

Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. We have analyst estimates for Arcadis going out as far as 2023, and you can see them free on our platform here.

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

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

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.