Last week, you might have seen that DWS Group GmbH & Co. KGaA (ETR:DWS) released its annual result to the market. The early response was not positive, with shares down 5.6% to €35.72 in the past week. Revenues of €2.6b were in line with forecasts, although statutory earnings per share (EPS) came in below expectations at €2.83, missing estimates by 3.0%. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there’s been a strong change in the company’s prospects, or if it’s business as usual. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.
Check out our latest analysis for DWS Group GmbH KGaA
Following last week’s earnings report, DWS Group GmbH KGaA’s eleven analysts are forecasting 2024 revenues to be €2.65b, approximately in line with the last 12 months. Statutory earnings per share are predicted to grow 11% to €3.13. Yet prior to the latest earnings, the analysts had been anticipated revenues of €2.72b and earnings per share (EPS) of €3.29 in 2024. It’s pretty clear that pessimism has reared its head after the latest results, leading to a weaker revenue outlook and a minor downgrade to earnings per share estimates.
Despite the cuts to forecast earnings, there was no real change to the €40.84 price target, showing that the analysts don’t think the changes have a meaningful impact on its intrinsic value. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. Currently, the most bullish analyst values DWS Group GmbH KGaA at €57.00 per share, while the most bearish prices it at €32.00. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the business.
Of course, another way to look at these forecasts is to place them into context against the industry itself. It’s pretty clear that there is an expectation that DWS Group GmbH KGaA’s revenue growth will slow down substantially, with revenues to the end of 2024 expected to display 1.5% growth on an annualised basis. This is compared to a historical growth rate of 4.0% over the past five years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 5.6% annually. So it’s pretty clear that, while revenue growth is expected to slow down, the wider industry is also expected to grow faster than DWS Group GmbH KGaA.
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. Unfortunately, they also downgraded their revenue estimates, and our data indicates underperformance compared to the wider industry. Even so, earnings per share are more important to the intrinsic value of the business. The consensus price target held steady at €40.84, with the latest estimates not enough to have an impact on their price targets.
With that said, the long-term trajectory of the company’s earnings is a lot more important than next year. We have estimates – from multiple DWS Group GmbH KGaA analysts – going out to 2026, and you can see them free on our platform here.
Don’t forget that there may still be risks. For instance, we’ve identified 1 warning sign for DWS Group GmbH KGaA that you should be aware of.
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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.