Earnings Miss: Compagnie Générale des Établissements Michelin Société en commandite par actions Missed EPS By 12% And Analysts Are Revising Their Forecasts

Last week, you might have seen that Compagnie Générale des Établissements Michelin Société en commandite par actions (EPA:ML) released its half-year result to the market. The early response was not positive, with shares down 3.5% to €31.07 in the past week. Revenues were in line with forecasts, at €13b, although statutory earnings per share came in 12% below what the analysts expected, at €1.17 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. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.

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Taking into account the latest results, Compagnie Générale des Établissements Michelin Société en commandite par actions' twelve analysts currently expect revenues in 2025 to be €26.7b, approximately in line with the last 12 months. Per-share earnings are expected to shoot up 33% to €2.95. Yet prior to the latest earnings, the analysts had been anticipated revenues of €27.0b and earnings per share (EPS) of €3.13 in 2025. The analysts seem to have become a little more negative on the business after the latest results, given the minor downgrade to their earnings per share numbers for next year.

View our latest analysis for Compagnie Générale des Établissements Michelin Société en commandite par actions

It might be a surprise to learn that the consensus price target was broadly unchanged at €36.22, with the analysts clearly implying that the forecast decline in earnings is not expected to have much of an impact on 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. There are some variant perceptions on Compagnie Générale des Établissements Michelin Société en commandite par actions, with the most bullish analyst valuing it at €43.00 and the most bearish at €28.00 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.

Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. These estimates imply that revenue is expected to slow, with a forecast annualised decline of 0.2% by the end of 2025. This indicates a significant reduction from annual growth of 6.0% over the last five years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 3.0% annually for the foreseeable future. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Compagnie Générale des Établissements Michelin Société en commandite par actions is expected to lag the wider industry.

The Bottom Line

The most important thing to take away is that the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. 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 held steady at €36.22, 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 Compagnie Générale des Établissements Michelin Société en commandite par actions going out to 2027, and you can see them free on our platform here.

We don't want to rain on the parade too much, but we did also find 2 warning signs for Compagnie Générale des Établissements Michelin Société en commandite par actions that you need to be mindful 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.