Earnings Beat: Capgemini SE Just Beat Analyst Forecasts, And Analysts Have Been Updating Their Models

Shareholders might have noticed that Capgemini SE (EPA:CAP) filed its half-year result this time last week. The early response was not positive, with shares down 6.1% to €185 in the past week. Capgemini reported €11b in revenue, roughly in line with analyst forecasts, although statutory earnings per share (EPS) of €4.71 beat expectations, being 7.5% higher than what the analysts expected. 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. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

Check out our latest analysis for Capgemini

Taking into account the latest results, Capgemini's 15 analysts currently expect revenues in 2024 to be €22.3b, approximately in line with the last 12 months. Statutory per-share earnings are expected to be €10.00, roughly flat on the last 12 months. Yet prior to the latest earnings, the analysts had been anticipated revenues of €22.7b and earnings per share (EPS) of €10.04 in 2024. The consensus analysts don't seem to have seen anything in these results that would have changed their view on the business, given there's been no major change to their estimates.

There were no changes to revenue or earnings estimates or the price target of €220, suggesting that the company has met expectations in its recent result. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. The most optimistic Capgemini analyst has a price target of €245 per share, while the most pessimistic values it at €195. The narrow spread of estimates could suggest that the business' future is relatively easy to value, or thatthe analysts have a strong view on its prospects.

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 Capgemini's revenue growth is expected to slow, with the forecast 0.7% annualised growth rate until the end of 2024 being well below the historical 12% 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 5.7% annually. Factoring in the forecast slowdown in growth, it seems obvious that Capgemini is also expected to grow slower than other industry participants.

The Bottom Line

The most important thing to take away is that there's been no major change in sentiment, with the analysts reconfirming that the business is performing in line with their previous earnings per share estimates. On the plus side, there were no major changes to revenue estimates; although forecasts imply they will 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.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have estimates - from multiple Capgemini analysts - going out to 2026, and you can see them free on our platform here.

It might also be worth considering whether Capgemini's debt load is appropriate, using our debt analysis tools on the Simply Wall St platform, here.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com