Results: Compagnie Générale des Établissements Michelin Société en commandite par actions Exceeded Expectations And The Consensus Has Updated Its Estimates

Investors in Compagnie Générale des Établissements Michelin Société en commandite par actions (EPA:ML) had a good week, as its shares rose 5.3% to close at €36.47 following the release of its half-year results. Compagnie Générale des Établissements Michelin Société en commandite par actions reported €13b in revenue, roughly in line with analyst forecasts, although statutory earnings per share (EPS) of €1.60 beat expectations, being 7.9% higher than what the analysts expected. 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. 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 Compagnie Générale des Établissements Michelin Société en commandite par actions

Following last week's earnings report, Compagnie Générale des Établissements Michelin Société en commandite par actions' 15 analysts are forecasting 2024 revenues to be €27.8b, approximately in line with the last 12 months. Statutory earnings per share are predicted to grow 20% to €3.24. In the lead-up to this report, the analysts had been modelling revenues of €28.1b and earnings per share (EPS) of €3.22 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 €37.38, showing that the business is executing well and in line with expectations. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. 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 €26.00 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. It's pretty clear that there is an expectation that Compagnie Générale des Établissements Michelin Société en commandite par actions' revenue growth will slow down substantially, with revenues to the end of 2024 expected to display 0.4% growth on an annualised basis. This is compared to a historical growth rate of 6.3% over the past 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 Compagnie Générale des Établissements Michelin Société en commandite par actions.

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. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting that it's tracking in line with expectations. Although our data does suggest that Compagnie Générale des Établissements Michelin Société en commandite par actions' revenue is expected to perform worse than the wider industry. The consensus price target held steady at €37.38, with the latest estimates not enough to have an impact on their price targets.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. At Simply Wall St, we have a full range of analyst estimates for Compagnie Générale des Établissements Michelin Société en commandite par actions going out to 2026, 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.

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