Galp Energia, SGPS, S.A. Just Beat Analyst Forecasts, And Analysts Have Been Updating Their Predictions

Galp Energia, SGPS, S.A. (ELI:GALP) investors will be delighted, with the company turning in some strong numbers with its latest results. It was a solid earnings report, with revenues and statutory earnings per share (EPS) both coming in strong. Revenues were 17% higher than the analysts had forecast, at €5.0b, while EPS were €0.43 beating analyst models by 42%. 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.

AI is about to change healthcare. These 20 stocks are working on everything from early diagnostics to drug discovery. The best part - they are all under $10bn in marketcap - there is still time to get in early.

Following the recent earnings report, the consensus from 18 analysts covering Galp Energia SGPS is for revenues of €19.8b in 2025. This implies a perceptible 2.8% decline in revenue compared to the last 12 months. Statutory earnings per share are forecast to fall 10% to €1.26 in the same period. Before this earnings report, the analysts had been forecasting revenues of €19.3b and earnings per share (EPS) of €1.09 in 2025. There's been a pretty noticeable increase in sentiment, with the analysts upgrading revenues and making a nice increase in earnings per share in particular.

See our latest analysis for Galp Energia SGPS

Despite these upgrades,the analysts have not made any major changes to their price target of €18.91, suggesting that the higher estimates are not likely to have a long term impact on what the stock is worth. 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 Galp Energia SGPS analyst has a price target of €23.00 per share, while the most pessimistic values it at €14.00. 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 Galp Energia SGPS shareholders.

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. These estimates imply that revenue is expected to slow, with a forecast annualised decline of 5.6% by the end of 2025. This indicates a significant reduction from annual growth of 11% 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 0.2% per year. It's pretty clear that Galp Energia SGPS' revenues are expected to perform substantially worse 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 Galp Energia SGPS following these results. They also upgraded their revenue estimates for next year, even though it is expected to grow slower than the wider industry. The consensus price target held steady at €18.91, 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 Galp Energia SGPS analysts - going out to 2027, and you can see them free on our platform here.

You still need to take note of risks, for example - Galp Energia SGPS has 1 warning sign we think you should be aware of.

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.