Ordina N.V. (AMS:ORDI) Just Reported And Analysts Have Been Lifting Their Price Targets

It's been a pretty great week for Ordina N.V. (AMS:ORDI) shareholders, with its shares surging 12% to €3.36 in the week since its latest yearly results. It was a credible result overall, with revenues of €369m and statutory earnings per share of €0.24 both in line with analyst estimates, showing that Ordina is executing in line with expectations. The analyst typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. So we gathered the latest post-earnings forecasts to see what estimate suggests is in store for next year.

See our latest analysis for Ordina

Taking into account the latest results, the current consensus from Ordina's sole analyst is for revenues of €381.6m in 2021, which would reflect a satisfactory 3.3% increase on its sales over the past 12 months. Statutory earnings per share are predicted to soar 26% to €0.26. In the lead-up to this report, the analyst had been modelling revenues of €383.9m and earnings per share (EPS) of €0.27 in 2021. So it looks like there's been a small decline in overall sentiment after the recent results - there's been no major change to revenue estimates, but the analyst did make a minor downgrade to their earnings per share forecasts.

Despite cutting their earnings forecasts,the analyst has lifted their price target 20% to €3.60, suggesting that these impacts are not expected to weigh on the stock's value in the long term.

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. It's clear from the latest estimates that Ordina's rate of growth is expected to accelerate meaningfully, with the forecast 3.3% revenue growth noticeably faster than its historical growth of 1.9%p.a. over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 13% per year. So it's clear that despite the acceleration in growth, Ordina is expected to grow meaningfully slower than the industry average.

The Bottom Line

The biggest concern is that the analyst reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Ordina. On the plus side, there were no major changes to revenue estimates; although forecasts imply revenues will perform worse than the wider industry. We note an upgrade to the price target, suggesting that the analyst believes the intrinsic value of the business is likely to improve over time.

With that in mind, we wouldn't be too quick to come to a conclusion on Ordina. Long-term earnings power is much more important than next year's profits. At least one analyst has provided forecasts out to 2023, which can be seen for free on our platform here.

Another thing to consider is whether management and directors have been buying or selling stock recently. We provide an overview of all open market stock trades for the last twelve months on our platform, here.

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This article by Simply Wall St is general in nature. 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.
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