Yahoo Finance Novem Group S.A. (ETR:NVM) Just Reported, And Analysts Assigned A €13.34 Price Target
Last week, you might have seen that Novem Group S.A. (ETR:NVM) released its first-quarter result to the market. The early response was not positive, with shares down 3.3% to €7.10 in the past week. Results were roughly in line with estimates, with revenues of €182m and statutory earnings per share of €1.16. 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've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.
See our latest analysis for Novem Group
Taking into account the latest results, the most recent consensus for Novem Group from five analysts is for revenues of €682.8m in 2024. If met, it would imply a reasonable 3.5% increase on its revenue over the past 12 months. Statutory earnings per share are forecast to shrink 2.8% to €1.03 in the same period. Yet prior to the latest earnings, the analysts had been anticipated revenues of €707.5m and earnings per share (EPS) of €1.12 in 2024. It's pretty clear that pessimism has reared its head after the latest results, leading to a weaker revenue outlook and a small dip in earnings per share estimates.
It'll come as no surprise then, to learn that the analysts have cut their price target 10% to €13.34. 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. There are some variant perceptions on Novem Group, with the most bullish analyst valuing it at €26.00 and the most bearish at €7.70 per share. We would probably assign less value to the analyst forecasts in this situation, because such a wide range of estimates could imply that the future of this business is difficult to value accurately. As a result it might not be a great idea to make decisions based on the consensus price target, which is after all just an average of this wide range of estimates.
These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Novem Group's past performance and to peers in the same industry. The analysts are definitely expecting Novem Group's growth to accelerate, with the forecast 4.7% annualised growth to the end of 2024 ranking favourably alongside historical growth of 0.5% per annum over the past five years. Other similar companies in the industry (with analyst coverage) are also forecast to grow their revenue at 4.8% per year. Factoring in the forecast acceleration in revenue, it's pretty clear that Novem Group is expected to grow at about the same rate as 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 Novem Group. Sadly, they also downgraded their revenue forecasts, but the business is still expected to grow at roughly the same rate as the industry itself. The consensus price target fell measurably, with the analysts seemingly not reassured by the latest results, leading to a lower estimate of Novem Group's future valuation.
With that in mind, we wouldn't be too quick to come to a conclusion on Novem Group. Long-term earnings power is much more important than next year's profits. We have estimates - from multiple Novem Group analysts - going out to 2026, 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 2 warning signs for Novem Group that you need to be mindful 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.
