Grand City Properties S.A. Earnings Missed Analyst Estimates: Here's What Analysts Are Forecasting Now

It's been a sad week for Grand City Properties S.A. (ETR:GYC), who've watched their investment drop 15% to €7.35 in the week since the company reported its full-year result. Results overall were not great, with earnings of €0.76 per share falling drastically short of analyst expectations. Meanwhile revenues hit €583m and were slightly better than forecasts. 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 Grand City Properties after the latest results.

View our latest analysis for Grand City Properties

Following the recent earnings report, the consensus from seven analysts covering Grand City Properties is for revenues of €544.0m in 2023, implying a measurable 6.6% decline in sales compared to the last 12 months. The company is forecast to report a statutory loss of €1.50 in 2023, a sharp decline from a profit over the last year. Before this latest report, the consensus had been expecting revenues of €566.2m and €1.50 per share in losses.

The consensus price target was broadly unchanged at €12.85, implying that the business is performing roughly in line with expectations, despite a downwards adjustment to forecast sales next year. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. There are some variant perceptions on Grand City Properties, with the most bullish analyst valuing it at €26.20 and the most bearish at €8.00 per share. So we wouldn't be assigning too much credibility to analyst price targets in this case, because there are clearly some widely different views on what kind of performance this business can generate. With this in mind, we wouldn't rely too heavily the consensus price target, as it is just an average and analysts clearly have some deeply divergent views on the business.

Of course, another way to look at these forecasts is to place them into context against the industry itself. We would highlight that sales are expected to reverse, with a forecast 6.6% annualised revenue decline to the end of 2023. That is a notable change from historical growth of 0.8% over the last five years. Yet aggregate analyst estimates for other companies in the industry suggest that industry revenues are forecast to decline 5.2% per year. So it's pretty clear that Grand City Properties' revenues are expected to shrink faster than the wider industry.

The Bottom Line

The most obvious conclusion is that the analysts made no changes to their forecasts for a loss next year. Unfortunately they also cut their revenue estimates for next year, and forecasts imply the business' revenues are expected to perform worse than the wider industry. That said, earnings per share are more important for creating value for shareholders. 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 Grand City Properties. Long-term earnings power is much more important than next year's profits. At Simply Wall St, we have a full range of analyst estimates for Grand City Properties going out to 2024, and you can see them free on our platform here..

Before you take the next step you should know about the 5 warning signs for Grand City Properties (2 are concerning!) that we have uncovered.

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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.