Koninklijke Philips N.V. Just Missed EPS By 19%: Here's What Analysts Think Will Happen Next

It's been a pretty great week for Koninklijke Philips N.V. (AMS:PHIA) shareholders, with its shares surging 11% to €26.53 in the week since its latest second-quarter results. It was not a great result overall. While revenues of €4.5b were in line with analyst predictions, earnings were less than expected, missing statutory estimates by 19% to hit €0.48 per share. 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.

View our latest analysis for Koninklijke Philips

Taking into account the latest results, the consensus forecast from Koninklijke Philips' 15 analysts is for revenues of €18.7b in 2024. This reflects a satisfactory 3.0% improvement in revenue compared to the last 12 months. Statutory losses are forecast to balloon 97% to €0.015 per share. Before this earnings report, the analysts had been forecasting revenues of €18.7b and earnings per share (EPS) of €0.14 in 2024. So despite reconfirming their revenue estimates, the analysts are now forecasting a loss instead of a profit, which looks like a definite drop in sentiment following the latest results.

Although the analysts are now forecasting higher losses, the average price target rose 5.5% to 25.14255, which could indicate that these losses are expected to be "one-off", or are not anticipated to have a longer-term impact on the business. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. The most optimistic Koninklijke Philips analyst has a price target of €35.00 per share, while the most pessimistic values it at €20.30. Analysts definitely have varying views on the business, but the spread of estimates is not wide enough in our view to suggest that extreme outcomes could await Koninklijke Philips shareholders.

One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. For example, we noticed that Koninklijke Philips' rate of growth is expected to accelerate meaningfully, with revenues forecast to exhibit 6.0% growth to the end of 2024 on an annualised basis. That is well above its historical decline of 0.8% a year 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 7.2% annually for the foreseeable future. So although Koninklijke Philips' revenue growth is expected to improve, it is still expected to grow slower than the industry.

The Bottom Line

The most important thing to take away is that the analysts are expecting Koninklijke Philips to become unprofitable next year. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting that it's tracking in line with expectations. Although our data does suggest that Koninklijke Philips' revenue is expected to perform worse than the wider 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.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have estimates - from multiple Koninklijke Philips analysts - going out to 2026, and you can see them free on our platform here.

Even so, be aware that Koninklijke Philips is showing 1 warning sign in our investment analysis , you should know about...

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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.

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