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It's been a good week for Mercedes-Benz Group AG (ETR:MBG) shareholders, because the company has just released its latest half-yearly results, and the shares gained 3.3% to €73.56. Mercedes-Benz Group reported €76b in revenue, roughly in line with analyst forecasts, although statutory earnings per share (EPS) of €3.34 beat expectations, being 8.2% higher than what the analysts expected. 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. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Mercedes-Benz Group after the latest results.
Check out our latest analysis for Mercedes-Benz Group
Following last week's earnings report, Mercedes-Benz Group's 19 analysts are forecasting 2023 revenues to be €154.4b, approximately in line with the last 12 months. Statutory earnings per share are forecast to fall 10% to €12.93 in the same period. Before this earnings report, the analysts had been forecasting revenues of €154.3b and earnings per share (EPS) of €12.62 in 2023. So the consensus seems to have become somewhat more optimistic on Mercedes-Benz Group's earnings potential following these results.
There's been no major changes to the consensus price target of €92.64, suggesting that the improved earnings per share outlook is not enough to have a long-term positive impact on the stock's valuation. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. The most optimistic Mercedes-Benz Group analyst has a price target of €120 per share, while the most pessimistic values it at €73.50. These price targets show that analysts do have some differing views on the business, but the estimates do not vary enough to suggest to us that some are betting on wild success or utter failure.
Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. We would also point out that the forecast 0.04% annualised revenue decline to the end of 2023 is better than the historical trend, which saw revenues shrink 4.1% annually over the past five years Compare this against analyst estimates for companies in the broader industry, which suggest that revenues (in aggregate) are expected to grow 3.4% annually. So while a broad number of companies are forecast to grow, unfortunately Mercedes-Benz Group is expected to see its revenue affected worse than other companies in the industry.