GLOBALFOUNDRIES Inc. (NASDAQ:GFS) Just Reported Full-Year Earnings: Have Analysts Changed Their Mind On The Stock?

GLOBALFOUNDRIES Inc. (NASDAQ:GFS) last week reported its latest annual results, which makes it a good time for investors to dive in and see if the business is performing in line with expectations. GLOBALFOUNDRIES reported in line with analyst predictions, delivering revenues of US$7.4b and statutory earnings per share of US$1.83, suggesting the business is executing well and in line with its plan. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

See our latest analysis for GLOBALFOUNDRIES

After the latest results, the consensus from GLOBALFOUNDRIES' 16 analysts is for revenues of US$6.76b in 2024, which would reflect a not inconsiderable 8.6% decline in revenue compared to the last year of performance. Statutory earnings per share are forecast to tumble 46% to US$0.99 in the same period. Before this earnings report, the analysts had been forecasting revenues of US$6.81b and earnings per share (EPS) of US$1.03 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 US$59.53, with the analysts seemingly voting that their lower forecast earnings are not expected to lead to a lower stock price in the foreseeable future. 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. The most optimistic GLOBALFOUNDRIES analyst has a price target of US$75.00 per share, while the most pessimistic values it at US$43.00. This shows there is still a bit of diversity in estimates, but analysts don't appear to be totally split on the stock as though it might be a success or failure situation.

Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. These estimates imply that revenue is expected to slow, with a forecast annualised decline of 8.6% by the end of 2024. This indicates a significant reduction from annual growth of 9.0% over the last five years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 17% annually for the foreseeable future. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - GLOBALFOUNDRIES is expected to lag the wider industry.

The Bottom Line

The most important thing to take away is that the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. On the plus side, there were no major changes to revenue estimates; although forecasts imply they will perform worse than the wider industry. The consensus price target held steady at US$59.53, 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 GLOBALFOUNDRIES analysts - going out to 2026, and you can see them free on our platform here.

You can also see our analysis of GLOBALFOUNDRIES' Board and CEO remuneration and experience, and whether company insiders have been buying stock.

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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.