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Gesco SE (ETR:GSC1) just released its quarterly report and things are looking bullish. The company beat expectations with revenues of €122m arriving 2.3% ahead of forecasts. Statutory earnings per share (EPS) were €0.19, 5.6% ahead of estimates. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.
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Following last week's earnings report, Gesco's four analysts are forecasting 2025 revenues to be €504.0m, approximately in line with the last 12 months. Per-share earnings are expected to shoot up 227% to €1.47. In the lead-up to this report, the analysts had been modelling revenues of €525.5m and earnings per share (EPS) of €1.60 in 2025. It's pretty clear that pessimism has reared its head after the latest results, leading to a weaker revenue outlook and a small dip in earnings per share estimates.
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The consensus price target fell 7.4% to €25.63, with the weaker earnings outlook clearly leading valuation estimates. 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 Gesco analyst has a price target of €33.00 per share, while the most pessimistic values it at €20.00. 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.
Of course, another way to look at these forecasts is to place them into context against the industry itself. These estimates imply that revenue is expected to slow, with a forecast annualised decline of 1.7% by the end of 2025. This indicates a significant reduction from annual growth of 6.3% 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 5.1% annually for the foreseeable future. It's pretty clear that Gesco's revenues are expected to perform substantially worse than the wider industry.
The Bottom Line
The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Gesco. Unfortunately, they also downgraded their revenue estimates, and our data indicates underperformance compared to the wider industry. Even so, earnings per share are more important to the intrinsic value of the business. Furthermore, the analysts also cut their price targets, suggesting that the latest news has led to greater pessimism about the intrinsic value of the business.