Earnings Update: Seco/Warwick S.A. (WSE:SWG) Just Reported Its First-Quarter Results And Analysts Are Updating Their Forecasts

Seco/Warwick S.A. (WSE:SWG) shareholders are probably feeling a little disappointed, since its shares fell 3.4% to zł28.40 in the week after its latest quarterly results. Seco/Warwick reported in line with analyst predictions, delivering revenues of zł182m and statutory earnings per share of zł4.14, suggesting the business is executing well and in line with its plan. This is an important time for investors, as they can track a company's performance in its report, look at what expert is forecasting for next year, and see if there has been any change to expectations for the business. We've gathered the most recent statutory forecasts to see whether the analyst has changed their earnings models, following these results.

Check out our latest analysis for Seco/Warwick

Taking into account the latest results, the current consensus from Seco/Warwick's lone analyst is for revenues of zł714.0m in 2024. This would reflect a reasonable 2.8% increase on its revenue over the past 12 months. Statutory earnings per share are forecast to plunge 26% to zł2.58 in the same period. In the lead-up to this report, the analyst had been modelling revenues of zł714.0m and earnings per share (EPS) of zł3.14 in 2024. So there's definitely been a decline in sentiment after the latest results, noting the substantial drop in new EPS forecasts.

It might be a surprise to learn that the consensus price target was broadly unchanged at zł30.91, with the analyst clearly implying that the forecast decline in earnings is not expected to have much of an impact on valuation.

Of course, another way to look at these forecasts is to place them into context against the industry itself. We would highlight that Seco/Warwick's revenue growth is expected to slow, with the forecast 3.7% annualised growth rate until the end of 2024 being well below the historical 12% p.a. growth over the last five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 7.6% per year. So it's pretty clear that, while revenue growth is expected to slow down, the wider industry is also expected to grow faster than Seco/Warwick.

The Bottom Line

The most important thing to take away is that the analyst downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. On the plus side, there were no major changes to revenue estimates; although forecasts imply they will perform worse 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.

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. At least one analyst has provided forecasts out to 2026, which can be seen for free on our platform here.

Don't forget that there may still be risks. For instance, we've identified 3 warning signs for Seco/Warwick (1 is a bit unpleasant) you should be aware of.

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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.