Earnings Update: Fresenius Medical Care AG & Co. KGaA (ETR:FME) Just Reported Its Full-Year Results And Analysts Are Updating Their Forecasts
Fresenius Medical Care AG & Co. KGaA (ETR:FME) came out with its full-year results last week, and we wanted to see how the business is performing and what industry forecasters think of the company following this report. Revenues of €19b were in line with forecasts, although statutory earnings per share (EPS) came in below expectations at €2.30, missing estimates by 4.6%. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.
Check out our latest analysis for Fresenius Medical Care KGaA
Taking into account the latest results, the most recent consensus for Fresenius Medical Care KGaA from 16 analysts is for revenues of €19.8b in 2023 which, if met, would be a credible 2.0% increase on its sales over the past 12 months. Statutory per share are forecast to be €2.27, approximately in line with the last 12 months. In the lead-up to this report, the analysts had been modelling revenues of €20.1b and earnings per share (EPS) of €2.49 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 €32.79, 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. There are some variant perceptions on Fresenius Medical Care KGaA, with the most bullish analyst valuing it at €67.00 and the most bearish at €17.40 per share. As you can see the range of estimates is wide, with the lowest valuation coming in at less than half the most bullish estimate, suggesting there are some strongly diverging views on how analysts think this business will perform. 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.
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 period to the end of 2023 brings more of the same, according to the analysts, with revenue forecast to display 2.0% growth on an annualised basis. That is in line with its 2.0% annual growth over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenues grow 4.2% per year. So it's pretty clear that Fresenius Medical Care KGaA is expected to grow slower than similar companies in the same 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. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting sales are tracking in line with expectations - although our data does suggest that Fresenius Medical Care KGaA's revenues are expected to perform worse than the wider industry. The consensus price target held steady at €32.79, with the latest estimates not enough to have an impact on their price targets.
With that in mind, we wouldn't be too quick to come to a conclusion on Fresenius Medical Care KGaA. Long-term earnings power is much more important than next year's profits. We have forecasts for Fresenius Medical Care KGaA going out to 2025, and you can see them free on our platform here.
And what about risks? Every company has them, and we've spotted 1 warning sign for Fresenius Medical Care KGaA you should know about.
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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.
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