Knorr-Bremse AG (ETR:KBX) came out with its second-quarter results last week, and we wanted to see how the business is performing and what industry forecasters think of the company following this report. It looks like the results were a bit of a negative overall. While revenues of €2.0b were in line with analyst predictions, statutory earnings were less than expected, missing estimates by 2.5% to hit €0.87 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. Readers will be glad to know we’ve aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Knorr-Bremse after the latest results.
Following last week’s earnings report, Knorr-Bremse’s 13 analysts are forecasting 2025 revenues to be €7.98b, approximately in line with the last 12 months. Per-share earnings are expected to jump 46% to €3.82. In the lead-up to this report, the analysts had been modelling revenues of €8.02b and earnings per share (EPS) of €3.90 in 2025. So it looks like there’s been a small decline in overall sentiment after the recent results – there’s been no major change to revenue estimates, but the analysts did make a minor downgrade to their earnings per share forecasts.
Check out our latest analysis for Knorr-Bremse
The consensus price target held steady at €86.93, with the analysts seemingly voting that their lower forecast earnings are not expected to lead to a lower stock price in the foreseeable future. The consensus price target is just an average of individual analyst targets, so – it could be handy to see how wide the range of underlying estimates is. There are some variant perceptions on Knorr-Bremse, with the most bullish analyst valuing it at €104 and the most bearish at €65.00 per share. There are definitely some different views on the stock, but the range of estimates is not wide enough as to imply that the situation is unforecastable, in our view.
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. We would highlight that Knorr-Bremse’s revenue growth is expected to slow, with the forecast 0.7% annualised growth rate until the end of 2025 being well below the historical 6.0% p.a. growth over the last five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 5.9% per year. Factoring in the forecast slowdown in growth, it seems obvious that Knorr-Bremse is also expected to grow slower than other industry participants.
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. On the plus side, there were no major changes to revenue estimates; although forecasts imply they will perform worse than the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.
With that in mind, we wouldn’t be too quick to come to a conclusion on Knorr-Bremse. Long-term earnings power is much more important than next year’s profits. We have forecasts for Knorr-Bremse going out to 2027, 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 Knorr-Bremse that we have uncovered.
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