Yahoo Finance Evonik Industries AG Just Beat Revenue By 11%: Here's What Analysts Think Will Happen Next
Evonik Industries AG (ETR:EVK) investors will be delighted, with the company turning in some strong numbers with its latest results. Evonik Industries beat revenue and statutory earnings per share (EPS) expectations, with sales hitting €4.9b (11% ahead of estimates) and EPS reaching €0.46 (a 5.1% beat). 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. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.
Check out our latest analysis for Evonik Industries
Following the recent earnings report, the consensus from 19 analysts covering Evonik Industries is for revenues of €17.0b in 2023, implying a noticeable 6.7% decline in sales compared to the last 12 months. Statutory earnings per share are forecast to fall 19% to €1.62 in the same period. Yet prior to the latest earnings, the analysts had been anticipated revenues of €16.9b and earnings per share (EPS) of €1.65 in 2023. The analysts seem to have become a little more negative on the business after the latest results, given the small dip in their earnings per share numbers for next year.
It might be a surprise to learn that the consensus price target was broadly unchanged at €24.56, with the analysts clearly implying that the forecast decline in earnings is not expected to have much of an impact on valuation. 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 Evonik Industries analyst has a price target of €36.00 per share, while the most pessimistic values it at €16.50. Note the wide gap in analyst price targets? This implies to us that there is a fairly broad range of possible scenarios for the underlying business.
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. These estimates imply that sales are expected to slow, with a forecast annualised revenue decline of 5.4% by the end of 2023. This indicates a significant reduction from annual growth of 3.2% over the last five years. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 0.8% per year. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Evonik Industries 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 sales are tracking in line with expectations - although our data does suggest that Evonik Industries' revenues are expected to 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.
With that said, the long-term trajectory of the company's earnings is a lot more important than next year. At Simply Wall St, we have a full range of analyst estimates for Evonik Industries going out to 2024, and you can see them free on our platform here..
It is also worth noting that we have found 1 warning sign for Evonik Industries that you need to take into consideration.
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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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