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Bouygues SA (EPA:EN) Just Reported First-Quarter Earnings: Have Analysts Changed Their Mind On The Stock?

The quarterly results for Bouygues SA (EPA:EN) were released last week, making it a good time to revisit its performance. It was an okay report, and revenues came in at €7.2b, approximately in line with analyst estimates leading up to the results announcement. 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. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.

View our latest analysis for Bouygues

ENXTPA:EN Past and Future Earnings May 19th 2020
ENXTPA:EN Past and Future Earnings May 19th 2020

After the latest results, the consensus from Bouygues' 13 analysts is for revenues of €33.8b in 2020, which would reflect a not inconsiderable 9.3% decline in sales compared to the last year of performance. Statutory earnings per share are forecast to plunge 54% to €1.25 in the same period. Yet prior to the latest earnings, the analysts had been anticipated revenues of €34.0b and earnings per share (EPS) of €1.59 in 2020. So there's definitely been a decline in sentiment after the latest results, noting the large cut to new EPS forecasts.

It might be a surprise to learn that the consensus price target was broadly unchanged at €33.66, with the analysts clearly implying that the forecast decline in earnings is not expected to have much of an impact on valuation. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. Currently, the most bullish analyst values Bouygues at €41.00 per share, while the most bearish prices it at €18.80. Note the wide gap in analyst price targets? This implies to us that there is a fairly broad range of possible scenarios for the underlying business.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Bouygues' past performance and to peers in the same industry. These estimates imply that sales are expected to slow, with a forecast revenue decline of 9.3%, a significant reduction from annual growth of 3.4% 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 1.9% annually for the foreseeable future. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Bouygues is expected to lag 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 Bouygues. On the plus side, there were no major changes to revenue estimates; although forecasts imply revenues will perform worse than the wider industry. The consensus price target held steady at €33.66, 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. At Simply Wall St, we have a full range of analyst estimates for Bouygues going out to 2022, and you can see them free on our platform here..

Plus, you should also learn about the 3 warning signs we've spotted with Bouygues .

Love or hate this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com.

This article by Simply Wall St is general in nature. 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. Thank you for reading.

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