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It's been a good week for Signify N.V. (AMS:LIGHT) shareholders, because the company has just released its latest third-quarter results, and the shares gained 3.4% to €28.06. The result was positive overall - although revenues of €1.9b were in line with what the analysts predicted, Signify surprised by delivering a statutory profit of €0.86 per share, modestly greater than expected. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.
View our latest analysis for Signify
Following the latest results, Signify's 13 analysts are now forecasting revenues of €7.73b in 2023. This would be a satisfactory 2.4% improvement in sales compared to the last 12 months. Statutory earnings per share are forecast to crater 26% to €3.58 in the same period. Before this earnings report, the analysts had been forecasting revenues of €7.73b and earnings per share (EPS) of €3.60 in 2023. The consensus analysts don't seem to have seen anything in these results that would have changed their view on the business, given there's been no major change to their estimates.
It will come as no surprise then, to learn that the consensus price target is largely unchanged at €43.69. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. There are some variant perceptions on Signify, with the most bullish analyst valuing it at €62.00 and the most bearish at €33.00 per share. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the business.
Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. It's clear from the latest estimates that Signify's rate of growth is expected to accelerate meaningfully, with the forecast 1.9% annualised revenue growth to the end of 2023 noticeably faster than its historical growth of 1.4% p.a. over the past five years. Compare this with other companies in the same industry, which are forecast to see revenue growth of 6.9% annually. So it's clear that despite the acceleration in growth, Signify is expected to grow meaningfully slower than the industry average.