Analyst Estimates: Here's What Brokers Think Of Tryg A/S (CPH:TRYG) After Its First-Quarter Report
Tryg A/S (CPH:TRYG) last week reported its latest first-quarter results, which makes it a good time for investors to dive in and see if the business is performing in line with expectations. Revenues of ø5.6b beat expectations by a respectable 2.9%, although statutory losses per share increased. Tryg lost ø1.47, which was 87% more than what the analysts had included in their models. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Tryg after the latest results.
See our latest analysis for Tryg
Taking into account the latest results, the consensus forecast from Tryg's ten analysts is for revenues of ø22.1b in 2020, which would reflect a modest 4.6% improvement in sales compared to the last 12 months. Statutory per share are forecast to be ø5.54, approximately in line with the last 12 months. Before this earnings report, the analysts had been forecasting revenues of ø22.1b and earnings per share (EPS) of ø6.60 in 2020. The analysts seem to have become more bearish following the latest results. While there were no changes to revenue forecasts, there was a substantial drop in EPS estimates.
The consensus price target held steady at ø172, with the analysts seemingly voting that their lower forecast earnings are not expected to lead to a lower stock price in the foreseeable future. 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. There are some variant perceptions on Tryg, with the most bullish analyst valuing it at ø215 and the most bearish at ø133 per share. There are definitely some different views on the stock, but the range of estimates is not wide enough as to imply that the situation is unforecastable, in our view.
One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. The analysts are definitely expecting Tryg'sgrowth to accelerate, with the forecast 4.6% growth ranking favourably alongside historical growth of 3.7% per annum over the past five years. Compare this with other companies in the same industry, which are forecast to see a revenue decline of 7.7% next year. It seems obvious that as part of the brighter growth outlook, Tryg is expected to grow faster than the wider industry.
The Bottom Line
The most important thing to take away is that the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. On the plus side, they made no changes to their revenue estimates - and they expect sales to perform better 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.
With that in mind, we wouldn't be too quick to come to a conclusion on Tryg. Long-term earnings power is much more important than next year's profits. We have forecasts for Tryg going out to 2024, and you can see them free on our platform here.
You still need to take note of risks, for example - Tryg has 2 warning signs we think you should be aware of.
If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Thank you for reading.
