Analysts Just Shaved Their Fresenius SE & Co. KGaA (ETR:FRE) Forecasts Dramatically
The latest analyst coverage could presage a bad day for Fresenius SE & Co. KGaA (ETR:FRE), with the analysts making across-the-board cuts to their statutory estimates that might leave shareholders a little shell-shocked. Both revenue and earnings per share (EPS) forecasts went under the knife, suggesting the analysts have soured majorly on the business.
Following the latest downgrade, the current consensus, from the dual analysts covering Fresenius SE KGaA, is for revenues of €24b in 2024, which would reflect a concerning 42% reduction in Fresenius SE KGaA's sales over the past 12 months. Statutory earnings per share are presumed to bounce 84% to €3.08. Prior to this update, the analysts had been forecasting revenues of €44b and earnings per share (EPS) of €3.54 in 2024. It looks like analyst sentiment has declined substantially, with a pretty serious reduction to revenue estimates and a real cut to earnings per share numbers as well.
View our latest analysis for Fresenius SE KGaA
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. We would highlight that sales are expected to reverse, with a forecast 36% annualised revenue decline to the end of 2024. That is a notable change from historical growth of 4.5% over the last five years. Yet aggregate analyst estimates for other companies in the industry suggest that industry revenues are forecast to decline 1.2% per year. The forecasts do look bearish for Fresenius SE KGaA, since they're expecting it to shrink faster than the industry.
The Bottom Line
The most important thing to take away is that analysts cut their earnings per share estimates, expecting a clear decline in business conditions. Unfortunately they also cut their revenue estimates for next year, and they expect sales to lag the wider market. That said, earnings per share are more important for creating value for shareholders. We wouldn't be surprised to find shareholders feeling a bit shell-shocked, after these downgrades. It looks like analysts have become a lot more bearish on Fresenius SE KGaA, and their negativity could be grounds for caution.
Still, 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 2025, which can be seen for free on our platform here.
Another way to search for interesting companies that could be reaching an inflection point is to track whether management are buying or selling, with our free list of growing companies that insiders are buying.
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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.
