thyssenkrupp AG Just Missed Earnings With A Surprise Loss - Here Are Analysts Latest Forecasts
It's been a sad week for thyssenkrupp AG (ETR:TKA), who've watched their investment drop 14% to €4.76 in the week since the company reported its first-quarter result. Revenues missed expectations, with revenue of €8.2b falling 10% short of forecasts. Earnings correspondingly dipped, with thyssenkrupp reporting a statutory loss of €0.50 per share, where the analysts were expecting a profit. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.
View our latest analysis for thyssenkrupp
Following last week's earnings report, thyssenkrupp's seven analysts are forecasting 2024 revenues to be €36.3b, approximately in line with the last 12 months. thyssenkrupp is also expected to turn profitable, with statutory earnings of €0.49 per share. In the lead-up to this report, the analysts had been modelling revenues of €36.6b and earnings per share (EPS) of €0.78 in 2024. So there's definitely been a decline in sentiment after the latest results, noting the large cut to new EPS forecasts.
It might be a surprise to learn that the consensus price target fell 5.4% to €8.68, with the analysts clearly linking lower forecast earnings to the performance of the stock price. 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. The most optimistic thyssenkrupp analyst has a price target of €16.00 per share, while the most pessimistic values it at €4.90. So we wouldn't be assigning too much credibility to analyst price targets in this case, because there are clearly some widely different views on what kind of performance this business can generate. As a result it might not be a great idea to make decisions based on the consensus price target, which is after all just an average of this wide range of estimates.
One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. We would highlight that revenue is expected to reverse, with a forecast 1.3% annualised decline to the end of 2024. That is a notable change from historical growth of 2.7% over the last five years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 0.2% annually for the foreseeable future. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - thyssenkrupp is expected to lag 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. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting that it's tracking in line with expectations. Although our data does suggest that thyssenkrupp's revenue is expected to perform worse than the wider industry. The consensus price target fell measurably, with the analysts seemingly not reassured by the latest results, leading to a lower estimate of thyssenkrupp's future valuation.
With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have forecasts for thyssenkrupp 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 1 warning sign for thyssenkrupp 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.
