Telefónica Deutschland Holding AG (ETR:O2D) just released its latest full-year results and things are looking bullish. Results overall were credible, with revenues arriving 2.7% better than analyst forecasts at €7.6b. Higher revenues also resulted in lower statutory losses, which were €0.07 per share, some 2.7% smaller than analysts expected. Earnings are an important time for investors, as they can track a company's performance, look at what top analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. We've gathered the most recent statutory forecasts to see whether analysts have changed their earnings models, following these results.

See our latest analysis for Telefónica Deutschland Holding

Following last week's earnings report, Telefónica Deutschland Holding's 20 analysts are forecasting 2020 revenues to be €7.50b, approximately in line with the last 12 months. Statutory losses are forecast to balloon 40% to €0.043 per share. Yet prior to the latest earnings, analysts had been forecasting revenues of €7.46b and losses of €0.0097 per share 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 consensus price target held steady at €3.12, seemingly implying that the higher forecast losses are not expected to have a long term impact on the company's valuation. 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 Telefónica Deutschland Holding analyst has a price target of €4.50 per share, while the most pessimistic values it at €2.40. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the business.

Another way to assess these estimates is by comparing them to past performance, and seeing whether analysts are more or less bullish relative to other companies in the market. We would highlight that sales are expected to reverse, with the forecast 1.1% revenue decline a notable change from historical growth of 1.4% over the last five years. By contrast, our data suggests that other companies (with analyst coverage) in the same market are forecast to see their revenue grow 1.2% annually for the foreseeable future. It's pretty clear that Telefónica Deutschland Holding's revenues are expected to perform substantially worse than the wider market.

The Bottom Line

The most obvious conclusion is that analysts made no changes to their forecasts for a loss next year. Fortunately, analysts also reconfirmed their revenue estimates, suggesting sales are tracking in line with expectations - although our data does suggest that Telefónica Deutschland Holding's revenues are expected to perform worse than the wider market. The consensus price target held steady at €3.12, with the latest estimates not enough to have an impact on analysts' estimated valuations.

Even so, the longer term trajectory of the business is much more important for the value creation of shareholders. We have estimates - from multiple Telefónica Deutschland Holding analysts - going out to 2024, and you can see them free on our platform here.

You can also view our analysis of Telefónica Deutschland Holding's balance sheet, and whether we think Telefónica Deutschland Holding is carrying too much debt, for free on our platform here.

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