There's been a notable change in appetite for Orsero S.p.A. (BIT:ORS) shares in the week since its annual report, with the stock down 12% to €4.80. It looks like a pretty bad result, all things considered. Although revenues of €1.0b were in line with analyst predictions, statutory earnings fell badly short, missing estimates by 82% to hit €0.12 per share. 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. With this in mind, we've gathered the latest statutory forecasts to see what analysts are expecting for next year.
Taking into account the latest results, the latest consensus from Orsero's three analysts is for revenues of €1.03b in 2020, which would reflect a satisfactory 2.1% improvement in sales compared to the last 12 months. Statutory earnings per share are expected to surge 603% to €0.84. Yet prior to the latest earnings, analysts had been forecasting revenues of €1.03b and earnings per share (EPS) of €0.79 in 2020. Analysts seem to have become more bullish on the business, judging by their new earnings per share estimates.
The consensus price target was unchanged at €8.60, implying that the improved earnings outlook is not expected to have a long term impact on value creation for shareholders. 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 Orsero at €9.50 per share, while the most bearish prices it at €8.00. The narrow spread of estimates could suggest that the business' future is relatively easy to value, or that analysts have a clear view on its prospects.
It can be useful to take a broader overview by seeing how analyst forecasts compare, both to the Orsero's past performance and to peers in the same market. It's pretty clear that analysts expect Orsero's revenue growth will slow down substantially, with revenues next year expected to grow 2.1%, compared to a historical growth rate of 14% over the past three years. Compare this against other companies (with analyst forecasts) in the market, which are in aggregate expected to see revenue growth of 3.1% next year. So it's pretty clear that, while revenue growth is expected to slow down, analysts still expect the wider market to grow faster than Orsero.
The Bottom Line
The most important thing to take away from this is that analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards Orsero following these results. Fortunately, analysts also reconfirmed their revenue estimates, suggesting sales are tracking in line with expectations - although our data does suggest that Orsero's revenues are expected to perform worse 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.
With that in mind, we wouldn't be too quick to come to a conclusion on Orsero. Long-term earnings power is much more important than next year's profits. We have forecasts for Orsero going out to 2021, and you can see them free on our platform here.
You can also see whether Orsero is carrying too much debt, and whether its balance sheet is healthy, for free on our platform here.
If you spot an error that warrants correction, please contact the editor at firstname.lastname@example.org. 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.
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. Thank you for reading.