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It's been a good week for Wacker Chemie AG (ETR:WCH) shareholders, because the company has just released its latest quarterly results, and the shares gained 3.7% to €141. It looks like a credible result overall - although revenues of €1.8b were what the analysts expected, Wacker Chemie surprised by delivering a (statutory) profit of €2.38 per share, an impressive 25% above what was forecast. 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.
View our latest analysis for Wacker Chemie
Taking into account the latest results, the 15 analysts covering Wacker Chemie provided consensus estimates of €6.59b revenue in 2023, which would reflect an uncomfortable 12% decline over the past 12 months. Statutory earnings per share are expected to dive 45% to €8.25 in the same period. In the lead-up to this report, the analysts had been modelling revenues of €6.66b and earnings per share (EPS) of €8.73 in 2023. The analysts seem to have become a little more negative on the business after the latest results, given the minor downgrade to their earnings per share numbers for next year.
It might be a surprise to learn that the consensus price target was broadly unchanged at €153, with the analysts clearly implying that the forecast decline in earnings is not expected to have much of an impact on valuation. 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 Chemie at €187 per share, while the most bearish prices it at €114. This shows there is still a bit of diversity in estimates, but analysts don't appear to be totally split on the stock as though it might be a success or failure situation.
Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. These estimates imply that revenue is expected to slow, with a forecast annualised decline of 22% by the end of 2023. This indicates a significant reduction from annual growth of 12% 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 2.3% annually for the foreseeable future. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Wacker Chemie is expected to lag the wider industry.