Results: GCC, S.A.B. de C.V. Beat Earnings Expectations And Analysts Now Have New Forecasts

It's been a good week for GCC, S.A.B. de C.V. (BMV:GCC) shareholders, because the company has just released its latest quarterly results, and the shares gained 4.8% to Mex$196. Revenues were US$280m, approximately in line with expectations, although statutory earnings per share (EPS) performed substantially better. EPS of US$0.15 were also better than expected, beating analyst predictions by 13%. 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 thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

See our latest analysis for GCC. de

Taking into account the latest results, GCC. de's eight analysts currently expect revenues in 2024 to be US$1.41b, approximately in line with the last 12 months. Per-share earnings are expected to accumulate 4.5% to US$0.98. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$1.42b and earnings per share (EPS) of US$0.91 in 2024. So the consensus seems to have become somewhat more optimistic on GCC. de's earnings potential following these results.

There's been no major changes to the consensus price target of Mex$231, suggesting that the improved earnings per share outlook is not enough to have a long-term positive impact on the stock's valuation. 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 GCC. de, with the most bullish analyst valuing it at Mex$256 and the most bearish at Mex$207 per share. Even so, with a relatively close grouping of estimates, it looks like the analysts are quite confident in their valuations, suggesting GCC. de is an easy business to forecast or the the analysts are all using similar assumptions.

Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. We would highlight that GCC. de's revenue growth is expected to slow, with the forecast 1.9% annualised growth rate until the end of 2024 being well below the historical 9.3% p.a. growth over the last five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenue shrink 0.4% per year. Factoring in the forecast slowdown in growth, it's pretty clear that GCC. de is still 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 GCC. de following these results. On the plus side, they made no changes to their revenue estimates - and they expect it to perform better than the wider industry. The consensus price target held steady at Mex$231, with the latest estimates not enough to have an impact on their price targets.

With that in mind, we wouldn't be too quick to come to a conclusion on GCC. de. Long-term earnings power is much more important than next year's profits. We have forecasts for GCC. de going out to 2026, and you can see them free on our platform here.

Another thing to consider is whether management and directors have been buying or selling stock recently. We provide an overview of all open market stock trades for the last twelve months on our platform, here.

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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.