It's been a pretty great week for ams-OSRAM AG (VTX:AMS) shareholders, with its shares surging 12% to CHF6.41 in the week since its latest quarterly results. It was a pretty bad result overall; while revenues were in line with expectations at €1.2b, statutory losses exploded to €1.42 per share. 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 thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

View our latest analysis for ams-OSRAM

Taking into account the latest results, the twelve analysts covering ams-OSRAM provided consensus estimates of €4.51b revenue in 2023, which would reflect a discernible 7.4% decline on its sales over the past 12 months. Earnings are expected to improve, with ams-OSRAM forecast to report a statutory profit of €0.22 per share. In the lead-up to this report, the analysts had been modelling revenues of €4.55b and earnings per share (EPS) of €0.39 in 2023. The 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 average price target fell 7.7% to CHF9.35, with reduced earnings forecasts clearly tied to a lower valuation estimate. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. There are some variant perceptions on ams-OSRAM, with the most bullish analyst valuing it at CHF18.00 and the most bearish at CHF5.30 per share. So we wouldn't be assigning too much credibility to analyst price targets in this case, because there are clearly some widely different views on what kind of performance this business can generate. With this in mind, we wouldn't rely too heavily the consensus price target, as it is just an average and analysts clearly have some deeply divergent views on the business.

One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. We would highlight that sales are expected to reverse, with a forecast 5.9% annualised revenue decline to the end of 2023. That is a notable change from historical growth of 36% 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 13% annually for the foreseeable future. It's pretty clear that ams-OSRAM's revenues are expected to perform substantially worse than the wider industry.

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. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting sales are tracking in line with expectations - although our data does suggest that ams-OSRAM's revenues are expected to perform worse than the wider industry. The consensus price target fell measurably, with the analysts seemingly not reassured by the latest results, leading to a lower estimate of ams-OSRAM's future valuation.

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 forecasts for ams-OSRAM going out to 2024, and you can see them free on our platform here.

Plus, you should also learn about the 2 warning signs we've spotted with ams-OSRAM (including 1 which is a bit concerning) .

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.

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