Earnings Release: Here's Why Analysts Cut Their Amadeus FiRe AG (ETR:AAD) Price Target To €49.00
Shareholders will be ecstatic, with their stake up 24% over the past week following Amadeus FiRe AG's (ETR:AAD) latest third-quarter results. 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. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.
After the latest results, the three analysts covering Amadeus FiRe are now predicting revenues of €373.0m in 2027. If met, this would reflect an okay 7.2% improvement in revenue compared to the last 12 months. Earnings are expected to improve, with Amadeus FiRe forecast to report a statutory profit of €1.62 per share. Yet prior to the latest earnings, the analysts had been anticipated revenues of €374.9m and earnings per share (EPS) of €1.64 in 2027. So it's pretty clear that, although the analysts have updated their estimates, there's been no major change in expectations for the business following the latest results.
See our latest analysis for Amadeus FiRe
The consensus price target fell 16% to €49.00, suggesting that the analysts might have been a bit enthusiastic in their previous valuation - or they were expecting the company to provide stronger guidance in the quarterly results. 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 Amadeus FiRe, with the most bullish analyst valuing it at €65.00 and the most bearish at €32.00 per share. 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.
Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. For example, we noticed that Amadeus FiRe's rate of growth is expected to accelerate meaningfully, with revenues forecast to exhibit 5.7% growth to the end of 2027 on an annualised basis. That is well above its historical decline of 1.1% a year over the past five years. Compare this against analyst estimates for the broader industry, which suggest that (in aggregate) industry revenues are expected to grow 5.8% annually. So while Amadeus FiRe's revenues are expected to improve, it seems that it is expected to grow at about the same rate as the overall industry.
The Bottom Line
The most important thing to take away is that there's been no major change in sentiment, with the analysts reconfirming that the business is performing in line with their previous earnings per share estimates. They also reconfirmed their revenue estimates, with the company predicted to grow at about the same rate as the wider industry. Furthermore, the analysts also cut their price targets, suggesting that the latest news has led to greater pessimism about the intrinsic value of the business.
With that in mind, we wouldn't be too quick to come to a conclusion on Amadeus FiRe. Long-term earnings power is much more important than next year's profits. We have estimates - from multiple Amadeus FiRe analysts - going out to 2028, and you can see them free on our platform here.
You can also see our analysis of Amadeus FiRe's Board and CEO remuneration and experience, and whether company insiders have been buying stock.
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