Royal Boskalis Westminster N.V. (AMS:BOKA) Just Reported And Analysts Have Been Lifting Their Price Targets

It's shaping up to be a tough period for Royal Boskalis Westminster N.V. (AMS:BOKA), which a week ago released some disappointing annual results that could have a notable impact on how the market views the stock. It was a pretty negative result overall, with revenues of €2.5b missing analyst predictions by 2.8%. Worse, the business reported a statutory loss of €0.74 per share, much larger than the analysts had forecast prior to the result. 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 Royal Boskalis Westminster

After the latest results, the seven analysts covering Royal Boskalis Westminster are now predicting revenues of €2.84b in 2021. If met, this would reflect a meaningful 13% improvement in sales compared to the last 12 months. Earnings are expected to improve, with Royal Boskalis Westminster forecast to report a statutory profit of €0.96 per share. In the lead-up to this report, the analysts had been modelling revenues of €2.79b and earnings per share (EPS) of €0.73 in 2021. There was no real change to the revenue estimates, but the analysts do seem more bullish on earnings, given the considerable lift to earnings per share expectations following these results.

The consensus price target rose 9.3% to €28.60, suggesting that higher earnings estimates flow through to the stock's valuation as well. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. There are some variant perceptions on Royal Boskalis Westminster, with the most bullish analyst valuing it at €31.50 and the most bearish at €24.00 per share. The narrow spread of estimates could suggest that the business' future is relatively easy to value, or thatthe analysts have a strong view on its prospects.

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. One thing stands out from these estimates, which is that Royal Boskalis Westminster is forecast to grow faster in the future than it has in the past, with revenues expected to display 13% annualised growth until the end of 2021. If achieved, this would be a much better result than the 1.9% annual decline over the past five years. Compare this against analyst estimates for the broader industry, which suggest that (in aggregate) industry revenues are expected to grow 4.4% annually. So it looks like Royal Boskalis Westminster is expected to grow faster than its competitors, at least for a while.

The Bottom Line

The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around Royal Boskalis Westminster's earnings potential next year. Fortunately, they also reconfirmed their revenue numbers, suggesting sales are tracking in line with expectations - and our data suggests that revenues are expected to grow faster 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.

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 Royal Boskalis Westminster going out to 2023, and you can see them free on our platform here..

And what about risks? Every company has them, and we've spotted 2 warning signs for Royal Boskalis Westminster you should know about.

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