Analysts Have Been Trimming Their Guerbet SA (EPA:GBT) Price Target After Its Latest Report

Guerbet SA (EPA:GBT) shareholders are probably feeling a little disappointed, since its shares fell 9.1% to €26.50 in the week after its latest full-year results. The result was fairly weak overall, with revenues of €712m being 2.7% less than what the analysts had been modelling. 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've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.

Check out our latest analysis for Guerbet

Following the latest results, Guerbet's four analysts are now forecasting revenues of €763.7m in 2022. This would be an okay 7.2% improvement in sales compared to the last 12 months. Statutory earnings per share are predicted to rise 4.9% to €2.74. In the lead-up to this report, the analysts had been modelling revenues of €779.8m and earnings per share (EPS) of €2.61 in 2022. So it's pretty clear that while sentiment around revenues has declined following the latest results, the analysts are now more bullish on the company's earnings power.

The analysts have cut their price target 6.2% to €38.75per share, suggesting that the declining revenue was a more crucial indicator than the expected improvement in earnings. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. There are some variant perceptions on Guerbet, with the most bullish analyst valuing it at €45.00 and the most bearish at €32.50 per share. This shows there is still a bit of diversity in estimates, but analysts don't appear to be totally split on the stock as though it might be a success or failure situation.

Of course, another way to look at these forecasts is to place them into context against the industry itself. One thing stands out from these estimates, which is that Guerbet is forecast to grow faster in the future than it has in the past, with revenues expected to display 7.2% annualised growth until the end of 2022. If achieved, this would be a much better result than the 9.3% annual decline over the past year. By contrast, our data suggests that other companies (with analyst coverage) in the industry are forecast to see their revenue grow 4.6% per year. Not only are Guerbet's revenues expected to improve, it seems that the analysts are also expecting it to grow faster than 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 Guerbet following these results. Regrettably, they also downgraded their revenue estimates, but the latest forecasts still imply the business will grow faster than the wider industry. Yet - earnings are more important to the intrinsic value of the business. The consensus price target fell measurably, with the analysts seemingly not reassured by the latest results, leading to a lower estimate of Guerbet's future valuation.

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 Guerbet going out to 2023, 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 Guerbet 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.