Koninklijke BAM Groep nv (AMS:BAMNB) shares fell 7.5% to €2.44 in the week since its latest full-year results. It looks like a pretty bad result, all things considered. Although revenues of €7.2b were in line with analyst predictions, statutory earnings fell badly short, missing estimates by 85% to hit €0.04 per share. 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. We thought readers would find it interesting to see analysts' latest (statutory) post-earnings forecasts for next year.

View our latest analysis for Koninklijke BAM Groep

Taking into account the latest results, Koninklijke BAM Groep's four analysts currently expect revenues in 2020 to be €7.17b, approximately in line with the last 12 months. Earnings are expected to improve, with Koninklijke BAM Groep forecast to report a statutory profit of €0.37 per share. Yet prior to the latest earnings, analysts had been forecasting revenues of €7.22b and earnings per share (EPS) of €0.48 in 2020. Analysts seem to have become more bearish following the latest results. While there were no changes to revenue forecasts, there was a pretty serious reduction to EPS estimates.

The average analyst price target fell 12% to €2.95, with reduced earnings forecasts clearly tied to a lower valuation estimate. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. The most optimistic Koninklijke BAM Groep analyst has a price target of €3.35 per share, while the most pessimistic values it at €2.60. Still, with such a tight range of estimates, it suggests analysts have a pretty good idea of what they think the company is worth.

It can be useful to take a broader overview by seeing how analyst forecasts compare, both to the Koninklijke BAM Groep's past performance and to peers in the same market. Over the past five years, revenues have declined around 0.8% annually. On the bright side, analysts expect the decline to level off somewhat, with the forecast for a 0.5% decline in revenue next year. By contrast, our data suggests that other companies (with analyst coverage) in the market are forecast to see their revenue decline 2.3% per year. So while it's not great to see that analysts are expecting a decline, at least Koninklijke BAM Groep is forecast to shrink at a slower rate than the wider market.

The Bottom Line

The biggest concern with the new estimates is that analysts have reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Koninklijke BAM Groep. Fortunately, analysts also reconfirmed their revenue estimates, suggesting sales are tracking in line with expectations - although our data does suggest that Koninklijke BAM Groep's revenues are expected to perform worse than the wider market. The consensus price target fell measurably, with analysts seemingly not reassured by the latest results, leading to a lower estimate of Koninklijke BAM Groep's future valuation.

With that in mind, we wouldn't be too quick to come to a conclusion on Koninklijke BAM Groep. Long-term earnings power is much more important than next year's profits. We have forecasts for Koninklijke BAM Groep going out to 2022, and you can see them free on our platform here.

Another thing to consider is whether management and directors have been buying or selling stock recently. We provide an overview of all open market stock trades for the last twelve months on our platform, here.

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