Earnings Miss: B&S Group S.A. Missed EPS By 20% And Analysts Are Revising Their Forecasts

Investors in B&S Group S.A. (AMS:BSGR) had a good week, as its shares rose 9.2% to close at €8.30 following the release of its annual results. Sales of €1.9b surpassed estimates by 2.6%, although statutory earnings per share missed badly, coming in 20% below expectations at €0.26 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.

See our latest analysis for B&S Group

Taking into account the latest results, the current consensus from B&S Group's five analysts is for revenues of €2.00b in 2021, which would reflect a reasonable 7.3% increase on its sales over the past 12 months. Statutory earnings per share are predicted to soar 61% to €0.42. In the lead-up to this report, the analysts had been modelling revenues of €1.96b and earnings per share (EPS) of €0.50 in 2021. So it's pretty clear the analysts have mixed opinions on B&S Group after the latest results; even though they upped their revenue numbers, it came at the cost of a substantial drop in per-share earnings expectations.

The consensus price target was unchanged at €9.20, suggesting the business is performing roughly in line with expectations, despite some adjustments to profit and revenue forecasts. 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. There are some variant perceptions on B&S Group, with the most bullish analyst valuing it at €10.50 and the most bearish at €7.00 per share. These price targets show that analysts do have some differing views on the business, but the estimates do not vary enough to suggest to us that some are betting on wild success or utter failure.

Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. Next year brings more of the same, according to the analysts, with revenue forecast to grow 7.3%, in line with its 8.5% annual growth over the past five years. Compare this with the wider industry, which analyst estimates (in aggregate) suggest will see revenues grow 5.4% next year. So although B&S Group is expected to maintain its revenue growth rate, it's definitely expected to grow faster than the wider industry.

The Bottom Line

The most important thing to take away is that the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. Happily, they also upgraded their revenue estimates, and are forecasting revenues to grow faster than the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.

With that in mind, we wouldn't be too quick to come to a conclusion on B&S Group. Long-term earnings power is much more important than next year's profits. We have estimates - from multiple B&S Group analysts - going out to 2023, and you can see them free on our platform here.

That said, it's still necessary to consider the ever-present spectre of investment risk. We've identified 2 warning signs with B&S Group , and understanding these should be part of your investment process.

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