Earnings Release: Here's Why Analysts Cut Their Gestamp Automoción, S.A. (BME:GEST) Price Target To €3.57

Gestamp Automoción, S.A. (BME:GEST) shareholders are probably feeling a little disappointed, since its shares fell 3.7% to €2.60 in the week after its latest quarterly results. It was an okay report, and revenues came in at €2.8b, approximately in line with analyst estimates leading up to the results announcement. 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. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.

See our latest analysis for Gestamp Automoción

Taking into account the latest results, the most recent consensus for Gestamp Automoción from ten analysts is for revenues of €12.6b in 2025. If met, it would imply a credible 3.5% increase on its revenue over the past 12 months. Statutory earnings per share are predicted to surge 69% to €0.54. Yet prior to the latest earnings, the analysts had been anticipated revenues of €12.8b and earnings per share (EPS) of €0.58 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.

It might be a surprise to learn that the consensus price target fell 11% to €3.57, with the analysts clearly linking lower forecast earnings to the performance of the stock price. 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 Gestamp Automoción, with the most bullish analyst valuing it at €4.80 and the most bearish at €2.65 per share. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the business.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Gestamp Automoción's past performance and to peers in the same industry. We would highlight that Gestamp Automoción's revenue growth is expected to slow, with the forecast 2.8% annualised growth rate until the end of 2025 being well below the historical 10% p.a. growth over the last five years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 6.6% annually. Factoring in the forecast slowdown in growth, it seems obvious that Gestamp Automoción is also expected to grow slower than other industry participants.

The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Gestamp Automoción. On the plus side, there were no major changes to revenue estimates; although forecasts imply they will perform worse than the wider industry. The consensus price target fell measurably, with the analysts seemingly not reassured by the latest results, leading to a lower estimate of Gestamp Automoción's future valuation.

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 Gestamp Automoción going out to 2026, and you can see them free on our platform here.

Even so, be aware that Gestamp Automoción is showing 3 warning signs in our investment analysis , you should know about...

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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.