BCE Inc. Just Missed EPS By 5.7%: Here's What Analysts Think Will Happen Next

Investors in BCE Inc. (TSE:BCE) had a good week, as its shares rose 3.3% to close at CA$47.60 following the release of its quarterly results. Revenues of CA$6.0b were in line with forecasts, although statutory earnings per share (EPS) came in below expectations at CA$0.59, missing estimates by 5.7%. 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. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on BCE after the latest results.

See our latest analysis for BCE

Following last week's earnings report, BCE's 16 analysts are forecasting 2024 revenues to be CA$24.7b, approximately in line with the last 12 months. Statutory earnings per share are predicted to expand 15% to CA$2.48. In the lead-up to this report, the analysts had been modelling revenues of CA$24.7b and earnings per share (EPS) of CA$2.47 in 2024. 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.

The analysts reconfirmed their price target of CA$49.81, showing that the business is executing well and in line with expectations. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. Currently, the most bullish analyst values BCE at CA$60.00 per share, while the most bearish prices it at CA$42.00. This shows there is still a bit of diversity in estimates, but analysts don't appear to be totally split on the stock as though it might be a success or failure situation.

One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. It's pretty clear that there is an expectation that BCE's revenue growth will slow down substantially, with revenues to the end of 2024 expected to display 0.7% growth on an annualised basis. This is compared to a historical growth rate of 1.2% 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 2.5% 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 BCE.

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. 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.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have forecasts for BCE going out to 2026, and you can see them free on our platform here.

Don't forget that there may still be risks. For instance, we've identified 2 warning signs for BCE that you should be aware of.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com