Orange S.A. Just Missed EPS By 53%: Here's What Analysts Think Will Happen Next

Orange S.A. (EPA:ORA) last week reported its latest interim results, which makes it a good time for investors to dive in and see if the business is performing in line with expectations. It looks like a pretty bad result, all things considered. Although revenues of €20b were in line with analyst predictions, statutory earnings fell badly short, missing estimates by 53% to hit €0.28 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. 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 Orange

After the latest results, the consensus from Orange's 17 analysts is for revenues of €40.4b in 2024, which would reflect an uncomfortable 9.5% decline in revenue compared to the last year of performance. Per-share earnings are expected to leap 35% to €1.04. In the lead-up to this report, the analysts had been modelling revenues of €40.6b and earnings per share (EPS) of €1.02 in 2024. So the consensus seems to have become somewhat more optimistic on Orange's earnings potential following these results.

There's been no major changes to the consensus price target of €12.96, suggesting that the improved earnings per share outlook is not enough to have a long-term positive impact on the stock's 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 Orange, with the most bullish analyst valuing it at €16.00 and the most bearish at €8.00 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.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Orange's past performance and to peers in the same industry. We would highlight that revenue is expected to reverse, with a forecast 18% annualised decline to the end of 2024. That is a notable change from historical growth of 0.8% over the last five years. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 1.9% per year. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Orange is expected to lag 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 Orange 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 Orange's revenue is expected to perform worse than the wider industry. The consensus price target held steady at €12.96, with the latest estimates not enough to have an impact on their price targets.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have estimates - from multiple Orange analysts - going out to 2026, and you can see them free on our platform here.

Before you take the next step you should know about the 3 warning signs for Orange that we have uncovered.

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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.

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