Getinge AB (STO: GETI B) investors had a good week as the stock rose 9.5% after the annual earnings release and closed at kr216. Getinge reported sales of 30 billion kr, which roughly corresponds to the forecasts of the analysts, although the statutory earnings per share (EPS) of 11.89 kr exceeded expectations and were 2.6% above the analysts’ expectations. Following the outcome, the analysts have updated their earnings model and it would be good to know if they think the company’s outlook has changed a lot or if things are going as usual. We have compiled the latest legal projections to see if analysts have changed their profit models following these results.
Check out our latest analysis for Getinge
According to the latest earnings report, ten analysts have agreed on sales of 27.3 billion kr for Getinge in 2021, which means a significant decrease in sales of 8.4% compared to the last 12 months. The statutory earnings per share are expected to decrease by 33% to 8.01 kr in the same period. In the run-up to this report, the analysts had modeled sales of 27.5 billion kr and earnings per share (EPS) of 7.68 kr in 2021. As a result, the consensus about Getinge’s profit potential appears to have become somewhat more optimistic following these results.
The consensus price target remained unchanged at 227 kr, which means the improved earnings outlook is unlikely to have any long-term impact on value creation for shareholders. The consensus price target is just an average of the individual analyst targets. Therefore, it can be helpful to see how wide the range of underlying estimates is. The most optimistic Getinge analyst has a price target of 276 kr per share, while the most pessimistic value is 150 kr. This shows that the estimates are still different, but analysts don’t seem completely divided on the stock, as if it could be a success or failure situation.
One way to get more context about these predictions is to examine how they compare to past performance and how other companies in the same industry are doing. These estimates assume that sales are expected to slow down with a forecast sales decline of 8.4%, a significant decrease from the 1.3% annual growth over the past five years. Compare that to our data, which suggests that other companies in the same industry are expected to grow 16% overall revenue over the next year. It’s pretty clear that Getinge’s sales are likely to outperform those of the industry as a whole.
The bottom line
Most importantly, analysts have improved their estimates for earnings per share, which suggests that optimism about Getinge has increased significantly following these results. On the positive side, there were no significant changes in sales estimates. However, forecasts assume that revenue will perform worse than the industry as a whole. The consensus price target remained stable at 227 kr with recent estimates insufficient to affect their price targets.
With that in mind, we believe that the long-term prospects for the business are far more relevant than next year’s earnings. On Simply Wall Street we have a full range of analyst estimates for Getinge through 2025 which you can view for free on our platform here.
You should also read up on the 3 warning signs that we have discovered at Getinge (including one that is important).
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