Earnings Release: Here's Why Analysts Cut Their AIXTRON SE (ETR:AIXA) Price Target To €35.14
There's been a notable change in appetite for AIXTRON SE (ETR:AIXA) shares in the week since its full-year report, with the stock down 13% to €28.32. It was a credible result overall, with revenues of €630m and statutory earnings per share of €1.29 both in line with analyst estimates, showing that AIXTRON is executing in line with expectations. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on AIXTRON after the latest results.
View our latest analysis for AIXTRON
After the latest results, the 14 analysts covering AIXTRON are now predicting revenues of €677.2m in 2024. If met, this would reflect an okay 7.5% improvement in revenue compared to the last 12 months. Statutory per share are forecast to be €1.30, approximately in line with the last 12 months. In the lead-up to this report, the analysts had been modelling revenues of €695.0m and earnings per share (EPS) of €1.43 in 2024. It's pretty clear that pessimism has reared its head after the latest results, leading to a weaker revenue outlook and a small dip in earnings per share estimates.
The consensus price target fell 11% to €35.14, with the weaker earnings outlook clearly leading valuation estimates. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. There are some variant perceptions on AIXTRON, with the most bullish analyst valuing it at €50.00 and the most bearish at €24.60 per share. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the business.
These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the AIXTRON's past performance and to peers in the same industry. We would highlight that AIXTRON's revenue growth is expected to slow, with the forecast 7.5% annualised growth rate until the end of 2024 being well below the historical 20% p.a. growth over the last five years. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 8.2% annually. Factoring in the forecast slowdown in growth, it looks like AIXTRON is forecast to grow at about the same rate as the wider industry.
The Bottom Line
The most important thing to take away is that the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. They also downgraded their revenue estimates, although as we saw earlier, forecast growth is only expected to be about the same as the wider industry. Furthermore, the analysts also cut their price targets, suggesting that the latest news has led to greater pessimism about the intrinsic value of the business.
With that said, the long-term trajectory of the company's earnings is a lot more important than next year. At Simply Wall St, we have a full range of analyst estimates for AIXTRON going out to 2026, and you can see them free on our platform here..
We don't want to rain on the parade too much, but we did also find 2 warning signs for AIXTRON (1 is a bit unpleasant!) that you need to be mindful of.
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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.
