Georg Fischer AG Just Reported Annual Earnings: Have Analysts Changed Their Mind On The Stock?
It's been a mediocre week for Georg Fischer AG (VTX:FI-N) shareholders, with the stock dropping 11% to CHF821 in the week since its latest full-year results. It was a credible result overall, with revenues of CHF3.8b and statutory earnings per share of CHF42.00 both in line with analyst estimates, showing that Georg Fischer is executing in line with expectations. Following the result, 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. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether analysts have changed their mind on Georg Fischer after the latest results.
View our latest analysis for Georg Fischer
Following last week's earnings report, Georg Fischer's eight analysts are forecasting 2020 revenues to be CHF3.71b, approximately in line with the last 12 months. Statutory earnings per share are expected to leap 21% to CHF50.80. Before this earnings report, analysts had been forecasting revenues of CHF3.74b and earnings per share (EPS) of CHF52.58 in 2020. So it looks like there's been a small decline in overall sentiment after the recent results - there's been no major change to revenue estimates, but analysts did make a small dip in their earnings per share forecasts.
It might be a surprise to learn that the consensus price target was broadly unchanged at CHF1,081, with analysts clearly implying that the forecast decline in earnings is not expected to have much of an impact on valuation. 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. There are some variant perceptions on Georg Fischer, with the most bullish analyst valuing it at CHF1,150 and the most bearish at CHF1,000 per share. Still, with such a tight range of estimates, it suggests analysts have a pretty good idea of what they think the company is worth.
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 sales are expected to reverse, with the forecast 1.3% revenue decline a notable change from historical growth of 3.2% over the last five years. By contrast, our data suggests that other companies (with analyst coverage) in the same market are forecast to see their revenue grow 3.9% annually for the foreseeable future. It's pretty clear that Georg Fischer's revenues are expected to perform substantially worse than the wider market.
The Bottom Line
The biggest concern with the new estimates is that analysts have reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Georg Fischer. Fortunately, analysts also reconfirmed their revenue estimates, suggesting sales are tracking in line with expectations - although our data does suggest that Georg Fischer'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 Georg Fischer. Long-term earnings power is much more important than next year's profits. We have estimates - from multiple Georg Fischer analysts - going out to 2022, and you can see them free on our platform here.
You can also view our analysis of Georg Fischer's balance sheet, and whether we think Georg Fischer is carrying too much debt, for free on our platform here.
If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. 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.
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