It’s been a good week for Raiffeisen Bank International AG (VIE:RBI) shareholders, because the company has just released its latest third-quarter results, and the shares gained 7.7% to €22.18. Revenues were in line with forecasts, at €1.3b, although statutory earnings per share came in 15% below what analysts expected, at €0.88 per share. 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. So we gathered the latest post-earnings forecasts to see what analysts’ statutory forecasts suggest is in store for next year.
View our latest analysis for Raiffeisen Bank International
WBAG:RBI Past and Future Earnings, February 10th 2020
Following the latest results, Raiffeisen Bank International’s 15 analysts are now forecasting revenues of €5.64b in 2020. This would be a notable 8.3% improvement in sales compared to the last 12 months. Statutory per-share earnings are expected to be €3.56, roughly flat on the last 12 months. Before this earnings report, analysts had been forecasting revenues of €5.45b and earnings per share (EPS) of €3.61 in 2020. So it looks like there’s been no major change in sentiment following the latest results, although analysts have made a modest lift to to revenue forecasts.
Even though revenue forecasts increased, there was no change to the consensus price target of €26.67, suggesting analysts are focused on earnings as the driver of value creation. 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 Raiffeisen Bank International analyst has a price target of €34.40 per share, while the most pessimistic values it at €20.50. This shows there is still quite a bit of diversity in estimates, but analysts don’t appear to be totally split on the stock as though it might be a success or failure situation.
It can also be useful to step back and take a broader view of how analyst forecasts compare to Raiffeisen Bank International’s performance in recent years. We can infer from the latest estimates that analysts are expecting a continuation of Raiffeisen Bank International’s historical trends, as next year’s forecast 8.3% revenue growth is roughly in line with 8.4% annual revenue growth over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenues grow 3.6% per year. So although Raiffeisen Bank International is expected to maintain its revenue growth rate, it’s definitely expected to grow faster than the wider market.
The Bottom Line
The most important thing to take away is that there’s been no major change in sentiment, with analysts reconfirming that earnings per share are expected to continue performing in line with their prior expectations. Pleasantly, analysts also upgraded their revenue estimates, and their forecasts suggest the business is expected to grow faster than the wider market. The consensus price target held steady at €26.67, with the latest estimates not enough to have an impact on analysts’ estimated valuations.
With that in mind, we wouldn’t be too quick to come to a conclusion on Raiffeisen Bank International. Long-term earnings power is much more important than next year’s profits. We have forecasts for Raiffeisen Bank International 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.
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.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Thank you for reading.