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Brunello Cucinelli S.p.A. Full-Year Results: Here's What Analysts Are Forecasting For Next Year

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Simply Wall St
·4 min read
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Last week, you might have seen that Brunello Cucinelli S.p.A. (BIT:BC) released its annual result to the market. The early response was not positive, with shares down 8.2% to €26.96 in the past week. It looks like the results were a bit of a negative overall. While revenues of €608m were in line with analyst predictions, statutory earnings were less than expected, missing estimates by 3.4% to hit €0.77 per share. This is an important time for investors, as they can track a company's performance in its report, look at what top analysts are forecasting for next year, and see if there has been any change to expectations for the business. So we gathered the latest post-earnings forecasts to see what analysts' statutory forecasts suggest is in store for next year.

View our latest analysis for Brunello Cucinelli

BIT:BC Past and Future Earnings, March 14th 2020
BIT:BC Past and Future Earnings, March 14th 2020

Taking into account the latest results, the most recent consensus for Brunello Cucinelli from eight analysts is for revenues of €629.5m in 2020, which is a modest 3.6% increase on its sales over the past 12 months. Statutory earnings per share are forecast to drop 11% to €0.68 in the same period. Before this earnings report, analysts had been forecasting revenues of €648.0m and earnings per share (EPS) of €0.82 in 2020. From this we can that analyst sentiment has definitely become more bearish after the latest results, leading to lower revenue forecasts and a substantial drop in earnings per share estimates.

Analysts made no major changes to their price target of €30.08, suggesting the downgrades are not expected to have a long-term impact on Brunello Cucinelli's valuation. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. There are some variant perceptions on Brunello Cucinelli, with the most bullish analyst valuing it at €36.00 and the most bearish at €22.00 per share. This shows there is still quite a bit of diversity in estimates, but analysts don't appear to be totally split on the stock as though it might be a success or failure situation.

Further, we can compare these estimates to past performance, and see how Brunello Cucinelli forecasts compare to the wider market's forecast performance. We would highlight that Brunello Cucinelli's revenue growth is expected to slow, with forecast 3.6% increase next year well below the historical 10%p.a. growth over the last five years. Compare this to the other companies in this market with analyst coverage, which are forecast to grow their revenue at 4.1% per year. Factoring in the forecast slowdown in growth, it looks like analysts are expecting Brunello Cucinelli to grow at about the same rate as the wider market.

The Bottom Line

The most important thing to take away is that analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. Analysts also downgraded their revenue estimates, although as we saw earlier, forecast growth is only expected to be about the same as the wider market. 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 Brunello Cucinelli. Long-term earnings power is much more important than next year's profits. We have forecasts for Brunello Cucinelli going out to 2024, and you can see them free on our platform here.

It might also be worth considering whether Brunello Cucinelli's debt load is appropriate, using our debt analysis tools on the Simply Wall St platform, here.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. 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. Simply Wall St has no position in the stocks mentioned.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Thank you for reading.