Investors in Swisscom AG (VTX:SCMN) had a good week, as its shares rose 2.9% to close at CHF720 following the release of its third-quarter results. It looks like the results were a bit of a negative overall. While revenues of CHF3.7b were in line with analyst predictions, statutory earnings were less than expected, missing estimates by 6.3% to hit CHF6.62 per share. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.
Taking into account the latest results, Swisscom's 16 analysts currently expect revenues in 2027 to be CHF14.7b, approximately in line with the last 12 months. Per-share earnings are expected to climb 16% to CHF28.86. Yet prior to the latest earnings, the analysts had been anticipated revenues of CHF14.7b and earnings per share (EPS) of CHF28.86 in 2027. 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.
View our latest analysis for Swisscom
The analysts reconfirmed their price target of CHF574, showing that the business is executing well and in line with expectations. 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 Swisscom, with the most bullish analyst valuing it at CHF735 and the most bearish at CHF440 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.
These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Swisscom's past performance and to peers in the same industry. We would highlight that revenue is expected to reverse, with a forecast 0.8% annualised decline to the end of 2027. That is a notable change from historical growth of 6.8% over the last five years. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 2.2% per year. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Swisscom is expected to lag the wider 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. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting that it's tracking in line with expectations. Although our data does suggest that Swisscom's revenue is expected to perform worse than the wider industry. The consensus price target held steady at CHF574, with the latest estimates not enough to have an impact on their price targets.
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 forecasts for Swisscom going out to 2028, and you can see them free on our platform here.
You still need to take note of risks, for example - Swisscom has 2 warning signs we think you should be aware of.
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