Legrand SA (EPA:LR) Analysts Are Pretty Bullish On The Stock After Recent Results

Investors in Legrand SA (EPA:LR) had a good week, as its shares rose 3.2% to close at €129 following the release of its half-yearly results. It looks like the results were a bit of a negative overall. While revenues of €4.8b were in line with analyst predictions, statutory earnings were less than expected, missing estimates by 3.7% to hit €2.38 per share. The 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. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.

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Taking into account the latest results, the most recent consensus for Legrand from 17 analysts is for revenues of €9.48b in 2025. If met, it would imply a reasonable 2.9% increase on its revenue over the past 12 months. Per-share earnings are expected to accumulate 4.5% to €4.85. In the lead-up to this report, the analysts had been modelling revenues of €9.35b and earnings per share (EPS) of €4.72 in 2025. So the consensus seems to have become somewhat more optimistic on Legrand's earnings potential following these results.

View our latest analysis for Legrand

The analysts have been lifting their price targets on the back of the earnings upgrade, with the consensus price target rising 6.9% to €125. 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 Legrand, with the most bullish analyst valuing it at €160 and the most bearish at €82.00 per share. Note the wide gap in analyst price targets? This implies to us that there is a fairly broad range of possible scenarios for the underlying business.

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 Legrand's revenue growth is expected to slow, with the forecast 5.9% annualised growth rate until the end of 2025 being well below the historical 7.9% p.a. growth over the last five years. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 6.3% annually. Factoring in the forecast slowdown in growth, it looks like Legrand is forecast to grow at about the same rate as the wider industry.

The Bottom Line

The most important thing here is that the analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards Legrand following these results. They also reconfirmed their revenue estimates, with the company predicted to grow at about the same rate as the wider industry. There was also a nice increase in the price target, with the analysts clearly feeling that the intrinsic value of the business is improving.

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. At Simply Wall St, we have a full range of analyst estimates for Legrand going out to 2027, and you can see them free on our platform here..

Even so, be aware that Legrand is showing 1 warning sign in our investment analysis , you should know about...

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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.