It's been a pretty great week for Wacker Neuson SE (ETR:WAC) shareholders, with its shares surging 14% to €17.66 in the week since its latest quarterly results. It was a mildly positive result, with revenues exceeding expectations at €569m, while statutory earnings per share (EPS) of €1.99 were in line with analyst forecasts. 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.
Taking into account the latest results, the most recent consensus for Wacker Neuson from four analysts is for revenues of €2.17b in 2023 which, if met, would be a credible 7.7% increase on its sales over the past 12 months. Statutory earnings per share are predicted to accumulate 2.2% to €2.01. Before this earnings report, the analysts had been forecasting revenues of €2.12b and earnings per share (EPS) of €2.00 in 2023. There doesn't appear to have been a major change in sentiment following the results, other than the small increase to revenue estimates.
Even though revenue forecasts increased, there was no change to the consensus price target of €28.50, suggesting the analysts are focused on earnings as the driver of value creation. 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 Neuson at €30.00 per share, while the most bearish prices it at €26.00. This is a very narrow spread of estimates, implying either that Wacker Neuson is an easy company to value, or - more likely - the analysts are relying heavily on some key assumptions.
Of course, another way to look at these forecasts is to place them into context against the industry itself. It's clear from the latest estimates that Wacker Neuson's rate of growth is expected to accelerate meaningfully, with the forecast 6.2% annualised revenue growth to the end of 2023 noticeably faster than its historical growth of 3.9% p.a. over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 4.0% per year. Factoring in the forecast acceleration in revenue, it's pretty clear that Wacker Neuson is expected to grow much faster than its industry.
The Bottom Line
The most obvious conclusion is that there's been no major change in the business' prospects in recent times, with the analysts holding their earnings forecasts steady, in line with previous estimates. Happily, they also upgraded their revenue estimates, and are forecasting revenues to grow faster 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 Neuson going out to 2024, and you can see them free on our platform here..
However, before you get too enthused, we've discovered 1 warning sign for Wacker Neuson that you should be aware 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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