The Eurocash S.A. (WSE:EUR) Third-Quarter Results Are Out And Analysts Have Published New Forecasts

Investors in Eurocash S.A. (WSE:EUR) had a good week, as its shares rose 3.8% to close at zł14.93 following the release of its quarterly results. It was a workmanlike result, with revenues of zł7.0b coming in 3.4% ahead of expectations, and statutory earnings per share of zł0.50, in line with analyst appraisals. 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. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.

Check out our latest analysis for Eurocash

Taking into account the latest results, the current consensus from Eurocash's 13 analysts is for revenues of zł26.7b in 2021, which would reflect a reasonable 5.3% increase on its sales over the past 12 months. Per-share earnings are expected to soar 89% to zł0.74. Yet prior to the latest earnings, the analysts had been anticipated revenues of zł26.7b and earnings per share (EPS) of zł0.82 in 2021. The analysts seem to have become a little more negative on the business after the latest results, given the minor downgrade to their earnings per share numbers for next year.

The consensus price target held steady at zł20.72, with the analysts seemingly voting that their lower forecast earnings are not expected to lead to a lower stock price in the foreseeable future. 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. The most optimistic Eurocash analyst has a price target of zł30.00 per share, while the most pessimistic values it at zł14.50. Note the wide gap in analyst price targets? This implies to us that there is a fairly broad range of possible scenarios for the underlying business.

Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. We can infer from the latest estimates that forecasts expect a continuation of Eurocash'shistorical trends, as next year's 5.3% revenue growth is roughly in line with 5.1% annual revenue growth over the past five years. Compare this with the wider industry, which analyst estimates (in aggregate) suggest will see revenues grow 3.7% next year. So although Eurocash is expected to maintain its revenue growth rate, it's definitely expected to grow faster than the wider industry.

The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Eurocash. 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 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 said, the long-term trajectory of the company's earnings is a lot more important than next year. At Simply Wall St, we have a full range of analyst estimates for Eurocash going out to 2024, and you can see them free on our platform here..

We don't want to rain on the parade too much, but we did also find 2 warning signs for Eurocash (1 shouldn't be ignored!) that you need to be mindful of.

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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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