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Last week, you might have seen that Randstad N.V. (AMS:RAND) released its yearly result to the market. The early response was not positive, with shares down 2.7% to €58.82 in the past week. Randstad reported €28b in revenue, roughly in line with analyst forecasts, although statutory earnings per share (EPS) of €5.02 beat expectations, being 7.9% higher than what the analysts expected. 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. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.
See our latest analysis for Randstad
Taking into account the latest results, the twelve analysts covering Randstad provided consensus estimates of €27.0b revenue in 2023, which would reflect a noticeable 2.1% decline on its sales over the past 12 months. Statutory earnings per share are expected to fall 15% to €4.26 in the same period. In the lead-up to this report, the analysts had been modelling revenues of €26.6b and earnings per share (EPS) of €4.08 in 2023. The analysts seems to have become more bullish on the business, judging by their new earnings per share estimates.
The consensus price target was unchanged at €55.65, implying that the improved earnings outlook is not expected to have a long term impact on value creation for shareholders. 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. Currently, the most bullish analyst values Randstad at €80.00 per share, while the most bearish prices it at €42.00. Note the wide gap in analyst price targets? This implies to us that there is a fairly broad range of possible scenarios for the underlying 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 2.1% annualised revenue decline to the end of 2023. That is a notable change from historical growth of 2.1% 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 3.4% annually for the foreseeable future. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Randstad is expected to lag the wider industry.