Earnings Update: STMicroelectronics N.V. (EPA:STMPA) Just Reported And Analysts Are Trimming Their Forecasts

STMicroelectronics N.V. (EPA:STMPA) missed earnings with its latest quarterly results, disappointing overly-optimistic forecasters. Results look to have been somewhat negative - revenue fell 4.1% short of analyst estimates at US$3.5b, and statutory earnings of US$0.54 per share missed forecasts by 3.7%. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.

See our latest analysis for STMicroelectronics

Taking into account the latest results, the current consensus, from the 18 analysts covering STMicroelectronics, is for revenues of US$14.4b in 2024. This implies an uneasy 12% reduction in STMicroelectronics' revenue over the past 12 months. Statutory earnings per share are expected to crater 39% to US$2.34 in the same period. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$16.5b and earnings per share (EPS) of US$3.16 in 2024. It looks like sentiment has declined substantially in the aftermath of these results, with a substantial drop in revenue estimates and a large cut to earnings per share numbers as well.

The consensus price target fell 5.7% to €50.54, with the weaker earnings outlook clearly leading valuation estimates. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. There are some variant perceptions on STMicroelectronics, with the most bullish analyst valuing it at €66.78 and the most bearish at €33.05 per share. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the business.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the STMicroelectronics' past performance and to peers in the same industry. We would highlight that revenue is expected to reverse, with a forecast 16% annualised decline to the end of 2024. That is a notable change from historical growth of 15% over the last five years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 6.2% annually for the foreseeable future. It's pretty clear that STMicroelectronics' revenues are expected to perform substantially worse than the wider industry.

The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for STMicroelectronics. Unfortunately, they also downgraded their revenue estimates, and our data indicates underperformance compared to the wider industry. Even so, earnings per share are more important to the intrinsic value of the business. Furthermore, the analysts also cut their price targets, suggesting that the latest news has led to greater pessimism about the intrinsic value of the business.

With that in mind, we wouldn't be too quick to come to a conclusion on STMicroelectronics. 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 STMicroelectronics going out to 2026, and you can see them free on our platform here..

You can also see our analysis of STMicroelectronics' Board and CEO remuneration and experience, and whether company insiders have been buying stock.

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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.