Wienerberger AG Earnings Missed Analyst Estimates: Here's What Analysts Are Forecasting Now

·4 min read

Last week saw the newest quarterly earnings release from Wienerberger AG (VIE:WIE), an important milestone in the company's journey to build a stronger business. Revenues came in at €793m, in line with estimates, while Wienerberger reported a statutory loss of €0.94 per share, well short of prior analyst forecasts for a profit. 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 Wienerberger

WBAG:WIE Past and Future Earnings May 18th 2020
WBAG:WIE Past and Future Earnings May 18th 2020

Taking into account the latest results, the six analysts covering Wienerberger provided consensus estimates of €2.90b revenue in 2020, which would reflect a not inconsiderable 17% decline on its sales over the past 12 months. Statutory earnings per share are expected to plunge 91% to €0.095 in the same period. In the lead-up to this report, the analysts had been modelling revenues of €3.07b and earnings per share (EPS) of €1.18 in 2020. From this we can that sentiment has definitely become more bearish after the latest results, leading to lower revenue forecasts and a large cut to earnings per share estimates.

The analysts made no major changes to their price target of €19.69, suggesting the downgrades are not expected to have a long-term impact on Wienerberger'svaluation. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. The most optimistic Wienerberger analyst has a price target of €22.80 per share, while the most pessimistic values it at €18.00. The narrow spread of estimates could suggest that the business' future is relatively easy to value, or thatthe analysts have a strong view on its prospects.

Of course, another way to look at these forecasts is to place them into context against the industry itself. We would highlight that sales are expected to reverse, with the forecast 17% revenue decline a notable change from historical growth of 4.0% 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 1.3% annually for the foreseeable future. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Wienerberger 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. On the negative side, they also downgraded their revenue estimates, and forecasts imply revenues will perform worse than the wider industry. The consensus price target held steady at €19.69, with the latest estimates not enough to have an impact on their price targets.

With that in mind, we wouldn't be too quick to come to a conclusion on Wienerberger. Long-term earnings power is much more important than next year's profits. We have forecasts for Wienerberger going out to 2024, 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 4 warning signs for Wienerberger that you need to be mindful of.

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