Saipem SpA Just Beat EPS By 19%: Here's What Analysts Think Will Happen Next

Saipem SpA (BIT:SPM) defied analyst predictions to release its third-quarter results, which were ahead of market expectations. It was a decent earnings report, with revenues and statutory earnings per share (EPS) both performing well. Revenues were 10% higher than the analysts had forecast, at €3.7b, while EPS of €0.044 beat analyst models by 19%. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

View our latest analysis for Saipem

After the latest results, the 15 analysts covering Saipem are now predicting revenues of €14.4b in 2025. If met, this would reflect a credible 5.6% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to shoot up 55% to €0.24. Yet prior to the latest earnings, the analysts had been anticipated revenues of €14.1b and earnings per share (EPS) of €0.24 in 2025. So the consensus seems to have become somewhat more optimistic on Saipem's earnings potential following these results.

There's been no major changes to the consensus price target of €2.91, 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 Saipem, with the most bullish analyst valuing it at €3.40 and the most bearish at €2.10 per share. Analysts definitely have varying views on the business, but the spread of estimates is not wide enough in our view to suggest that extreme outcomes could await Saipem shareholders.

Of course, another way to look at these forecasts is to place them into context against the industry itself. It's pretty clear that there is an expectation that Saipem's revenue growth will slow down substantially, with revenues to the end of 2025 expected to display 4.5% growth on an annualised basis. This is compared to a historical growth rate of 11% over the past five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 2.8% annually. Even after the forecast slowdown in growth, it seems obvious that Saipem is also expected 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 Saipem following these results. Happily, there were no major changes to revenue forecasts, with the business still expected to grow faster than the wider industry. The consensus price target held steady at €2.91, with the latest estimates not enough to have an impact on their price targets.

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. We have estimates - from multiple Saipem analysts - going out to 2026, 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 1 warning sign for Saipem 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.