Wacker Chemie AG Beat Analyst Estimates: See What The Consensus Is Forecasting For This Year
It's been a good week for Wacker Chemie AG (ETR:WCH) shareholders, because the company has just released its latest quarterly results, and the shares gained 3.7% to €141. It looks like a credible result overall - although revenues of €1.8b were what the analysts expected, Wacker Chemie surprised by delivering a (statutory) profit of €2.38 per share, an impressive 25% above what was forecast. 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 thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.
View our latest analysis for Wacker Chemie
Taking into account the latest results, the 15 analysts covering Wacker Chemie provided consensus estimates of €6.59b revenue in 2023, which would reflect an uncomfortable 12% decline over the past 12 months. Statutory earnings per share are expected to dive 45% to €8.25 in the same period. In the lead-up to this report, the analysts had been modelling revenues of €6.66b and earnings per share (EPS) of €8.73 in 2023. The analysts seem to have become a little more negative on the business after the latest results, given the minor downgrade to their earnings per share numbers for next year.
It might be a surprise to learn that the consensus price target was broadly unchanged at €153, with the analysts clearly implying that the forecast decline in earnings is not expected to have much of an impact on valuation. 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 Wacker Chemie at €187 per share, while the most bearish prices it at €114. This shows there is still a bit of diversity in estimates, but analysts don't appear to be totally split on the stock as though it might be a success or failure situation.
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. These estimates imply that revenue is expected to slow, with a forecast annualised decline of 22% by the end of 2023. This indicates a significant reduction from annual growth of 12% 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 2.3% annually for the foreseeable future. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Wacker Chemie is expected to lag the wider industry.
The Bottom Line
The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Wacker Chemie. On the plus side, there were no major changes to revenue estimates; although forecasts imply they 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. At Simply Wall St, we have a full range of analyst estimates for Wacker Chemie going out to 2025, 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 3 warning signs for Wacker Chemie (1 shouldn't be ignored!) 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.
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