Last week, you might have seen that Public Joint-Stock Company Unipro (MCX:UPRO) released its quarterly result to the market. The early response was not positive, with shares down 6.9% to ₽2.61 in the past week. Unipro missed revenue estimates by 3.6%, with sales of ₽20b, although statutory earnings per share (EPS) of ₽0.30 beat expectations, coming in 2.1% ahead of analyst estimates. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.
Taking into account the latest results, the most recent consensus for Unipro from six analysts is for revenues of ₽81.2b in 2020 which, if met, would be a credible 4.5% increase on its sales over the past 12 months. Statutory per share are forecast to be ₽0.28, approximately in line with the last 12 months. Yet prior to the latest earnings, the analysts had been anticipated revenues of ₽84.2b and earnings per share (EPS) of ₽0.32 in 2020. The analysts seem less optimistic after the recent results, reducing their sales forecasts and making a real cut to earnings per share numbers.
The analysts made no major changes to their price target of ₽3.14, suggesting the downgrades are not expected to have a long-term impact on Unipro'svaluation. 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. Currently, the most bullish analyst values Unipro at ₽3.70 per share, while the most bearish prices it at ₽2.70. There are definitely some different views on the stock, but the range of estimates is not wide enough as to imply that the situation is unforecastable, in our view.
Of course, another way to look at these forecasts is to place them into context against the industry itself. The analysts are definitely expecting Unipro'sgrowth to accelerate, with the forecast 4.5% growth ranking favourably alongside historical growth of 0.9% per annum over the past five years. Compare this with other companies in the same industry, which are forecast to see revenue growth of 9.7% next year. So it's clear that despite the acceleration in growth, Unipro is expected to grow meaningfully slower than the industry average.
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. Unfortunately, they also downgraded their revenue estimates, and our data indicates revenues are expected to perform worse than the wider industry. Even so, earnings per share are more important to the intrinsic value of the business. 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.
With that in mind, we wouldn't be too quick to come to a conclusion on Unipro. Long-term earnings power is much more important than next year's profits. We have forecasts for Unipro going out to 2024, and you can see them free on our platform here.
Don't forget that there may still be risks. For instance, we've identified 1 warning sign for Unipro that you should be aware of.
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