Yahoo Finance Carl Zeiss Meditec AG Earnings Missed Analyst Estimates: Here's What Analysts Are Forecasting Now
It's been a sad week for Carl Zeiss Meditec AG (ETR:AFX), who've watched their investment drop 16% to €81.35 in the week since the company reported its half-yearly result. Revenues were in line with forecasts, at €715m, although statutory earnings per share came in 15% below what the analysts expected, at €0.28 per share. 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.
Check out our latest analysis for Carl Zeiss Meditec
After the latest results, the consensus from Carl Zeiss Meditec's eleven analysts is for revenues of €1.41b in 2020, which would reflect a noticeable 6.7% decline in sales compared to the last year of performance. Statutory earnings per share are forecast to sink 17% to €1.54 in the same period. Yet prior to the latest earnings, the analysts had been anticipated revenues of €1.44b and earnings per share (EPS) of €1.65 in 2020. The analysts are less bullish than they were before these results, given the reduced revenue forecasts and the small dip in earnings per share expectations.
The analysts made no major changes to their price target of €97.70, suggesting the downgrades are not expected to have a long-term impact on Carl Zeiss Meditec'svaluation. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. Currently, the most bullish analyst values Carl Zeiss Meditec at €135 per share, while the most bearish prices it at €55.00. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the 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 revenue decline of 6.7%, a significant reduction from annual growth of 8.6% 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 7.4% annually for the foreseeable future. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Carl Zeiss Meditec 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 Carl Zeiss Meditec. 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 €97.70, with the latest estimates not enough to have an impact on their price targets.
Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have forecasts for Carl Zeiss Meditec going out to 2024, and you can see them free on our platform here.
Even so, be aware that Carl Zeiss Meditec is showing 1 warning sign in our investment analysis , you should know about...
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