CPH Chemie + Papier Holding AG (VTX:CPHN) last week reported its latest yearly results, which makes it a good time for investors to dive in and see if the business is performing in line with expectations. It looks like a credible result overall - although revenues of CHF530m were in line with what analysts predicted, CPH Chemie + Papier Holding surprised by delivering a statutory profit of CHF8.06 per share, a notable 15% above expectations. Earnings are an important time for investors, as they can track a company's performance, look at what top 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 analysts are expecting for next year.
After the latest results, the consensus from CPH Chemie + Papier Holding's four analysts is for revenues of CHF509.0m in 2020, which would reflect a small 4.0% decline in sales compared to the last year of performance. Statutory earnings per share are expected to crater 44% to CHF4.55 in the same period. Before this earnings report, analysts had been forecasting revenues of CHF532.0m and earnings per share (EPS) of CHF6.18 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 pretty serious reduction to earnings per share estimates.
The consensus price target fell 7.1% to CHF97.50, with the weaker earnings outlook clearly leading analyst valuation estimates. 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. There are some variant perceptions on CPH Chemie + Papier Holding, with the most bullish analyst valuing it at CHF110 and the most bearish at CHF85.00 per share. The narrow spread of estimates could suggest that the business' future is relatively easy to value, or that analysts have a clear view on its prospects.
It can also be useful to step back and take a broader view of how analyst forecasts compare to CPH Chemie + Papier Holding's performance in recent years. These estimates imply that sales are expected to slow, with a forecast revenue decline of 4.0% a significant reduction from annual growth of 4.4% over the last five years. By contrast, our data suggests that other companies (with analyst coverage) in the same market are forecast to see their revenue grow 0.7% annually for the foreseeable future. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - analysts also expect CPH Chemie + Papier Holding to grow slower than the wider market.
The Bottom Line
The biggest concern with the new estimates is that analysts have reduced their earnings per share estimates, suggesting business headwinds could lay ahead for CPH Chemie + Papier Holding. On the negative side, they also downgraded their revenue estimates, and forecasts imply revenues will perform worse than the wider market. Analysts also downgraded their price target, suggesting that the latest news has led analysts to become more pessimistic about the intrinsic value of the business.
Still, the long-term prospects of the business are much more relevant than next year's earnings. We have estimates - from multiple CPH Chemie + Papier Holding analysts - going out to 2022, and you can see them free on our platform here.
You can also see whether CPH Chemie + Papier Holding is carrying too much debt, and whether its balance sheet is healthy, for free on our platform here.
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