Lisi S.A. Just Missed EPS By 27%: Here's What Analysts Think Will Happen Next

Investors in Lisi S.A. (EPA:FII) had a good week, as its shares rose 2.4% to close at €23.55 following the release of its full-year results. Results overall were not great, with earnings of €0.81 per share falling drastically short of analyst expectations. Meanwhile revenues hit €1.7b and were slightly better than forecasts. 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.

See our latest analysis for Lisi

Taking into account the latest results, the consensus forecast from Lisi's four analysts is for revenues of €1.78b in 2024. This reflects a modest 6.2% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to shoot up 62% to €1.34. In the lead-up to this report, the analysts had been modelling revenues of €1.76b and earnings per share (EPS) of €1.49 in 2024. So there's definitely been a decline in sentiment after the latest results, noting the real cut to new EPS forecasts.

It might be a surprise to learn that the consensus price target was broadly unchanged at €24.72, 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 Lisi, with the most bullish analyst valuing it at €28.00 and the most bearish at €22.50 per share. With such a narrow range of valuations, the analysts apparently share similar views on what they think the business is worth.

Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. One thing stands out from these estimates, which is that Lisi is forecast to grow faster in the future than it has in the past, with revenues expected to display 6.2% annualised growth until the end of 2024. If achieved, this would be a much better result than the 5.4% annual decline over the past five years. Compare this against analyst estimates for the broader industry, which suggest that (in aggregate) industry revenues are expected to grow 9.7% annually for the foreseeable future. So although Lisi's revenue growth is expected to improve, it is still expected to grow slower than the 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. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting that it's tracking in line with expectations. Although our data does suggest that Lisi's revenue is expected to perform worse than the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.

With that in mind, we wouldn't be too quick to come to a conclusion on Lisi. Long-term earnings power is much more important than next year's profits. We have estimates - from multiple Lisi analysts - going out to 2025, and you can see them free on our platform here.

Even so, be aware that Lisi is showing 2 warning signs in our investment analysis , and 1 of those is a bit unpleasant...

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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.