Alstom SA Reported A Surprise Loss, And Analysts Have Updated Their Forecasts

Investors in Alstom SA (EPA:ALO) had a good week, as its shares rose 10.0% to close at €17.11 following the release of its full-year results. Revenues came in at €18b, in line with estimates, while Alstom reported a statutory loss of €0.81 per share, well short of prior analyst forecasts for a profit. 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. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.

View our latest analysis for Alstom

Taking into account the latest results, the most recent consensus for Alstom from 14 analysts is for revenues of €18.3b in 2025. If met, it would imply a credible 3.8% increase on its revenue over the past 12 months. Alstom is also expected to turn profitable, with statutory earnings of €0.76 per share. Before this earnings report, the analysts had been forecasting revenues of €18.1b and earnings per share (EPS) of €0.78 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 was broadly unchanged at €19.49, with the analysts clearly implying that the forecast decline in earnings is not expected to have much of an impact on valuation. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. The most optimistic Alstom analyst has a price target of €33.00 per share, while the most pessimistic values it at €8.00. With such a wide range in price targets, analysts are almost certainly betting on widely divergent outcomes in the underlying business. As a result it might not be a great idea to make decisions based on the consensus price target, which is after all just an average of this wide range of estimates.

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. We would highlight that Alstom's revenue growth is expected to slow, with the forecast 3.8% annualised growth rate until the end of 2025 being well below the historical 21% 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 5.5% annually. So it's pretty clear that, while revenue growth is expected to slow down, the wider industry is also expected to grow faster than Alstom.

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 €19.49, with the latest estimates not enough to have an impact on their price targets.

With that in mind, we wouldn't be too quick to come to a conclusion on Alstom. Long-term earnings power is much more important than next year's profits. At Simply Wall St, we have a full range of analyst estimates for Alstom going out to 2027, and you can see them free on our platform here..

You can also view our analysis of Alstom's balance sheet, and whether we think Alstom is carrying too much debt, for free on our platform here.

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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.