Gerresheimer AG Just Missed EPS By 19%: Here's What Analysts Think Will Happen Next
It's been a good week for Gerresheimer AG (ETR:GXI) shareholders, because the company has just released its latest first-quarter results, and the shares gained 7.8% to €65.75. Revenues were in line with forecasts, at €304m, although statutory earnings per share came in 19% below what the analysts expected, at €0.13 per share. 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. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.
View our latest analysis for Gerresheimer
After the latest results, the twelve analysts covering Gerresheimer are now predicting revenues of €1.45b in 2020. If met, this would reflect a satisfactory 4.7% improvement in sales compared to the last 12 months. Earnings are expected to improve, with Gerresheimer forecast to report a statutory profit of €2.53 per share. In the lead-up to this report, the analysts had been modelling revenues of €1.46b and earnings per share (EPS) of €2.51 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.
There were no changes to revenue or earnings estimates or the price target of €72.45, suggesting that the company has met expectations in its recent result. 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 Gerresheimer, with the most bullish analyst valuing it at €85.00 and the most bearish at €50.00 per share. Analysts definitely have varying views on the business, but the spread of estimates is not wide enough in our view to suggest that extreme outcomes could await Gerresheimer shareholders.
Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. It's clear from the latest estimates that Gerresheimer's rate of growth is expected to accelerate meaningfully, with the forecast 4.7% revenue growth noticeably faster than its historical growth of 1.6%p.a. over the past five years. Compare this with other companies in the same industry, which are forecast to see revenue growth of 8.0% next year. So it's clear that despite the acceleration in growth, Gerresheimer is expected to grow meaningfully slower than the industry average.
The Bottom Line
The most obvious conclusion is that there's been no major change in the business' prospects in recent times, with the analysts holding their earnings forecasts steady, in line with previous estimates. On the plus side, there were no major changes to revenue estimates; although forecasts imply revenues will perform worse than the wider industry. 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.
Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. We have forecasts for Gerresheimer going out to 2024, 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 Gerresheimer (1 shouldn't be ignored!) that you need to be mindful of.
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