Valeo SE Just Recorded A 20% EPS Beat: Here's What Analysts Are Forecasting Next

Investors in Valeo SE (EPA:FR) had a good week, as its shares rose 9.7% to close at €10.35 following the release of its half-yearly results. Revenues were €11b, approximately in line with expectations, although statutory earnings per share (EPS) performed substantially better. EPS of €0.58 were also better than expected, beating analyst predictions by 20%. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

Check out our latest analysis for Valeo

Taking into account the latest results, Valeo's eleven analysts currently expect revenues in 2024 to be €22.1b, approximately in line with the last 12 months. Per-share earnings are expected to grow 17% to €1.17. Before this earnings report, the analysts had been forecasting revenues of €22.6b and earnings per share (EPS) of €1.20 in 2024. The analysts are less bullish than they were before these results, given the reduced revenue forecasts and the small dip in earnings per share expectations.

The analysts made no major changes to their price target of €14.23, suggesting the downgrades are not expected to have a long-term impact on Valeo's valuation. 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. The most optimistic Valeo analyst has a price target of €22.00 per share, while the most pessimistic values it at €10.00. Note the wide gap in analyst price targets? This implies to us that there is a fairly broad range of possible scenarios for the underlying business.

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 Valeo's revenue growth is expected to slow, with the forecast 1.0% annualised growth rate until the end of 2024 being well below the historical 4.6% 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 3.4% per year. So it's pretty clear that, while revenue growth is expected to slow down, the wider industry is also expected to grow faster than Valeo.

The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Valeo. On the negative side, they also downgraded their revenue estimates, and forecasts imply they will perform worse than the wider industry. The consensus price target held steady at €14.23, with the latest estimates not enough to have an impact on their price targets.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. At Simply Wall St, we have a full range of analyst estimates for Valeo 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 3 warning signs for Valeo that you should be aware of.

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

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