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Técnicas Reunidas, S.A. (BME:TRE) First-Quarter Results Just Came Out: Here's What Analysts Are Forecasting For This Year

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Shareholders of Técnicas Reunidas, S.A. (BME:TRE) will be pleased this week, given that the stock price is up 12% to €14.29 following its latest quarterly results. It was an okay result overall, with revenues coming in at €1.2b, roughly what the analysts had been expecting. 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. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.

View our latest analysis for Técnicas Reunidas

BME:TRE Past and Future Earnings May 28th 2020
BME:TRE Past and Future Earnings May 28th 2020

Following last week's earnings report, Técnicas Reunidas' eight analysts are forecasting 2020 revenues to be €4.94b, approximately in line with the last 12 months. Técnicas Reunidas is also expected to turn profitable, with statutory earnings of €1.46 per share. Before this earnings report, the analysts had been forecasting revenues of €5.16b and earnings per share (EPS) of €1.91 in 2020. The analysts seem less optimistic after the recent results, reducing their sales forecasts and making a pretty serious reduction to earnings per share numbers.

The analysts made no major changes to their price target of €24.66, suggesting the downgrades are not expected to have a long-term impact on Técnicas Reunidas'valuation. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. There are some variant perceptions on Técnicas Reunidas, with the most bullish analyst valuing it at €31.60 and the most bearish at €19.00 per share. These price targets show that analysts do have some differing views on the business, but the estimates do not vary enough to suggest to us that some are betting on wild success or utter failure.

Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. We would highlight that sales are expected to reverse, with the forecast 0.5% revenue decline a notable change from historical growth of 3.4% over the last five years. By contrast, our data suggests that other companies (with analyst coverage) in the industry are forecast to see their revenue decline 1.0% annually for the foreseeable future. The forecasts do look comparatively optimistic for Técnicas Reunidas, since they're expecting it to shrink slower than the 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. Sadly they also cut their revenue estimates, although at least the company is expected to perform a bit better than the wider industry. The consensus price target held steady at €24.66, with the latest estimates not enough to have an impact on their price targets.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have forecasts for Técnicas Reunidas going out to 2023, and you can see them free on our platform here.

Don't forget that there may still be risks. For instance, we've identified 2 warning signs for Técnicas Reunidas (1 is significant) you should be aware of.

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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. 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. Thank you for reading.