Results: Jerónimo Martins, SGPS, S.A. Beat Earnings Expectations And Analysts Now Have New Forecasts

Jerónimo Martins, SGPS, S.A. (ELI:JMT) investors will be delighted, with the company turning in some strong numbers with its latest results. The company beat expectations with revenues of €8.1b arriving 2.1% ahead of forecasts. Statutory earnings per share (EPS) were €0.15, 5.2% ahead of estimates. 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. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.

See our latest analysis for Jerónimo Martins SGPS

Following the latest results, Jerónimo Martins SGPS' 19 analysts are now forecasting revenues of €34.0b in 2024. This would be a satisfactory 6.7% improvement in revenue compared to the last 12 months. Statutory per-share earnings are expected to be €1.15, roughly flat on the last 12 months. Yet prior to the latest earnings, the analysts had been anticipated revenues of €34.1b and earnings per share (EPS) of €1.19 in 2024. So it looks like there's been a small decline in overall sentiment after the recent results - there's been no major change to revenue estimates, but the analysts did make a minor downgrade to their earnings per share forecasts.

The consensus price target held steady at €23.51, with the analysts seemingly voting that their lower forecast earnings are not expected to lead to a lower stock price in the foreseeable future. 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. Currently, the most bullish analyst values Jerónimo Martins SGPS at €28.60 per share, while the most bearish prices it at €18.50. These price targets show that analysts do have some differing views on the business, but the estimates do not vary enough to suggest to us that some are betting on wild success or utter failure.

One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. We would highlight that Jerónimo Martins SGPS' revenue growth is expected to slow, with the forecast 9.1% annualised growth rate until the end of 2024 being well below the historical 12% p.a. growth over the last five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 4.7% annually. So it's pretty clear that, while Jerónimo Martins SGPS' revenue growth is expected to slow, it's still expected to grow faster than the industry itself.

The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Jerónimo Martins SGPS. Happily, there were no major changes to revenue forecasts, with the business still expected to grow faster 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 Jerónimo Martins SGPS analysts - going out to 2026, and you can see them free on our platform here.

However, before you get too enthused, we've discovered 1 warning sign for Jerónimo Martins SGPS that you should be aware 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.