Deutsche Post AG Just Reported Third-Quarter Earnings: Have Analysts Changed Their Mind On The Stock?
Investors in Deutsche Post AG (ETR:DPW) had a good week, as its shares rose 3.9% to close at €34.20 following the release of its third-quarter results. It was a workmanlike result, with revenues of €16b coming in 2.1% ahead of expectations, and earnings per share of €0.45, in line with analyst appraisals. 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. We've gathered the most recent forecasts to see whether analysts have changed their earnings models, following these results.
See our latest analysis for Deutsche Post
Taking into account the latest results, the latest consensus from Deutsche Post's 18 analysts is for revenues of €66.7b in 2020, which would reflect a reasonable 5.0% improvement in sales compared to the last 12 months. Earnings per share are expected to swell 18% to €2.47. Before this earnings report, analysts had been forecasting revenues of €66.6b and earnings per share (EPS) of €2.46 in 2020. The consensus analysts don't seem to have seen anything in these results that would have changed their view on the business, given there's been no major change to their estimates.
It will come as no surprise then, to learn that the consensus price target is largely unchanged at €35.99. The consensus price target just an average of individual analyst targets, so - considering that the price target changed, it would be handy to see how wide the range of underlying estimates is. The most optimistic Deutsche Post analyst has a price target of €45.00 per share, while the most pessimistic values it at €28.00. 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.
It can also be useful to step back and take a broader view of how analyst forecasts compare to Deutsche Post's performance in recent years. It's clear from the latest estimates that Deutsche Post's rate of growth is expected to accelerate meaningfully, with forecast 5.0% revenue growth noticeably faster than its historical growth of 1.8%p.a. over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 2.4% per year. Factoring in the forecast acceleration in revenue, it's pretty clear that Deutsche Post is expected to grow much faster than its market.
The Bottom Line
The most important thing to take away is that there's been no major change in sentiment, with analysts reconfirming that earnings per share are expected to continue performing in line with their prior expectations. Happily, there were no major changes to revenue forecasts, with analysts still expecting the business to grow faster than 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.
Still, the long-term prospects of the business are much more relevant than next year's earnings. We have forecasts for Deutsche Post going out to 2023, and you can see them free on our platform here.
It might also be worth considering whether Deutsche Post's debt load is appropriate, using our debt analysis tools on the Simply Wall St platform, here.
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.
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. Thank you for reading.
