Earnings Release: Here's Why Analysts Cut Their Stevanato Group S.p.A. (NYSE:STVN) Price Target To US$22.04
Shareholders in Stevanato Group S.p.A. (NYSE:STVN) had a terrible week, as shares crashed 35% to US$13.21 in the week since its latest third-quarter results. It looks like the results were a bit of a negative overall. While revenues of €326m were in line with analyst predictions, statutory earnings were less than expected, missing estimates by 3.9% to hit €0.15 per share. 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. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.
After the latest results, the 13 analysts covering Stevanato Group are now predicting revenues of €1.33b in 2027. If met, this would reflect a satisfactory 6.5% improvement in revenue compared to the last 12 months. Per-share earnings are expected to soar 25% to €0.64. In the lead-up to this report, the analysts had been modelling revenues of €1.38b and earnings per share (EPS) of €0.71 in 2027. The analysts are less bullish than they were before these results, given the reduced revenue forecasts and the small dip in earnings per share expectations.
Check out our latest analysis for Stevanato Group
The consensus price target fell 11% to US$22.04, with the weaker earnings outlook clearly leading valuation estimates. 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. The most optimistic Stevanato Group analyst has a price target of US$32.00 per share, while the most pessimistic values it at US$16.00. 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.
Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. It's pretty clear that there is an expectation that Stevanato Group's revenue growth will slow down substantially, with revenues to the end of 2027 expected to display 5.1% growth on an annualised basis. This is compared to a historical growth rate of 7.6% over the past five years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 7.0% annually. So it's pretty clear that, while revenue growth is expected to slow down, the wider industry is also expected to grow faster than Stevanato Group.
The Bottom Line
The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Stevanato Group. Unfortunately, they also downgraded their revenue estimates, and our data indicates underperformance compared to the wider industry. Even so, earnings per share are more important to the intrinsic value of the business. 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.
Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. We have estimates - from multiple Stevanato Group analysts - going out to 2028, and you can see them free on our platform here.
Before you take the next step you should know about the 1 warning sign for Stevanato Group that we have uncovered.
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