It's been a mediocre week for Symrise AG (ETR:SY1) shareholders, with the stock dropping 12% to €81.24 in the week since its latest annual results. Revenues of €3.4b were in line with forecasts, although statutory earnings per share (EPS) came in below expectations at €2.17, missing estimates by 5.7%. 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 statutory forecasts to see whether analysts have changed their earnings models, following these results.
After the latest results, the 19 analysts covering Symrise are now predicting revenues of €3.74b in 2020. If met, this would reflect a notable 9.7% improvement in sales compared to the last 12 months. Statutory earnings per share are expected to surge 21% to €2.67. Before this earnings report, analysts had been forecasting revenues of €3.75b and earnings per share (EPS) of €2.74 in 2020. So it looks like there's been a small decline in overall sentiment after the recent results - there's been no major change to revenue estimates, but analysts did make a small dip in their earnings per share forecasts.
It might be a surprise to learn that the consensus price target was broadly unchanged at €86.25, with analysts clearly implying that the forecast decline in earnings is not expected to have much of an impact on valuation. 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. Currently, the most bullish analyst values Symrise at €110 per share, while the most bearish prices it at €52.00. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the business.
It can also be useful to step back and take a broader view of how analyst forecasts compare to Symrise's performance in recent years. Analysts are definitely expecting Symrise's growth to accelerate, with the forecast 9.7% growth ranking favourably alongside historical growth of 7.3% per annum over the past five years. Compare this with other companies in the same market, which are forecast to grow their revenue 3.9% next year. It seems obvious that, while the growth outlook is brighter than the recent past, analysts also expect Symrise to grow faster than 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. 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.
Even so, the longer term trajectory of the business is much more important for the value creation of shareholders. We have forecasts for Symrise going out to 2024, and you can see them free on our platform here.
It might also be worth considering whether Symrise's debt load is appropriate, using our debt analysis tools on the Simply Wall St platform, here.
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