money OVB Holding AG (ETR:O4B) Analysts Are Cutting Their Estimates: Here's What You Need To Know
OVB Holding AG (ETR:O4B) shareholders are probably feeling a little disappointed, since its shares fell 5.1% to €15.00 in the week after its latest full-year results. The result was positive overall - although revenues of €258m were in line with what the analysts predicted, OVB Holding surprised by delivering a statutory profit of €0.77 per share, modestly greater than expected. Earnings are an important time for investors, as they can track a company's performance, look at what the 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 the analysts have changed their earnings models, following these results.
View our latest analysis for OVB Holding
After the latest results, the consensus from OVB Holding's twin analysts is for revenues of €249.0m in 2020, which would reflect a discernible 3.5% decline in sales compared to the last year of performance. Statutory earnings per share are expected to plummet 30% to €0.54 in the same period. Yet prior to the latest earnings, the analysts had been anticipated revenues of €266.7m and earnings per share (EPS) of €0.80 in 2020. The analysts seem less optimistic after the recent results, reducing their sales forecasts and making a large cut to earnings per share numbers.
Despite the cuts to forecast earnings, there was no real change to the €21.50 price target, showing that the analysts don't think the changes have a meaningful impact on its intrinsic value.
Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. We would highlight that sales are expected to reverse, with the forecast 3.5% revenue decline a notable change from historical growth of 4.0% 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 0.9% annually for the foreseeable future. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - OVB Holding is expected to lag the wider industry.
The Bottom Line
The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for OVB Holding. On the negative side, they also downgraded their revenue estimates, and forecasts imply revenues will perform worse 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.
Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have analyst estimates for OVB Holding going out as far as 2024, and you can see them free on our platform here.
That said, it's still necessary to consider the ever-present spectre of investment risk. We've identified 1 warning sign with OVB Holding , and understanding it should be part of your investment process.
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.
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