Société Générale Société anonyme Just Missed EPS By 15%: Here's What Analysts Think Will Happen Next

Investors in Société Générale Société anonyme (EPA:GLE) had a good week, as its shares rose 9.8% to close at €28.39 following the release of its quarterly results. Revenues were in line with forecasts, at €6.0b, although earnings per share came in 15% below what analysts expected, at €0.80 per share. 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. Readers will be glad to know we've aggregated the latest forecasts to see whether analysts have changed their mind on Société Générale Société anonyme after the latest results.

View our latest analysis for Société Générale Société anonyme

Taking into account the latest results, the most recent consensus for Société Générale Société anonyme from 15 analysts is for revenues of €25b in 2020, which is a satisfactory 7.7% increase on its sales over the past 12 months. Earnings per share are expected to soar 27% to €3.95. Yet prior to the latest earnings, analysts had been forecasting revenues of €25b and earnings per share (EPS) of €4.05 in 2020. Analysts seem to have become a little more negative on the business after the latest results, given the small dip in their earnings per share forecasts for next year.

It might be a surprise to learn that the consensus price target was broadly unchanged at €27.81, with 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. The most optimistic Société Générale Société anonyme analyst has a price target of €35.00 per share, while the most pessimistic values it at €17.05. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the business.

One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. Analysts are definitely expecting Société Générale Société anonyme's growth to accelerate, with the forecast 7.7% growth ranking favourably alongside historical growth of 1.1% per annum over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 3.1% per year. Factoring in the forecast acceleration in revenue, it's pretty clear that Société Générale Société anonyme is expected to grow much faster than its market.

The Bottom Line

The most important thing to take away is that analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. Fortunately, analysts also reconfirmed their revenue estimates, suggesting sales are tracking in line with expectations - and our data does suggest that Société Générale Société anonyme's revenues are expected to grow faster than the wider market. The consensus price target held steady at €27.81, with the latest estimates not enough to have an impact on analysts' estimated valuations.

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 Société Générale Société anonyme going out to 2022, and you can see them free on our platform here..

We also provide an overview of the Société Générale Société anonyme Board and CEO remuneration and length of tenure at the company, and whether insiders have been buying the stock, here.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.