Yahoo Finance Gates Industrial Corporation plc Earnings Missed Analyst Estimates: Here's What Analysts Are Forecasting Now
Gates Industrial Corporation plc (NYSE:GTES) shareholders are probably feeling a little disappointed, since its shares fell 8.7% to US$16.18 in the week after its latest quarterly results. It looks like a pretty bad result, all things considered. Although revenues of US$863m were in line with analyst predictions, statutory earnings fell badly short, missing estimates by 31% to hit US$0.15 per share. 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. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.
View our latest analysis for Gates Industrial
Following last week's earnings report, Gates Industrial's eight analysts are forecasting 2024 revenues to be US$3.53b, approximately in line with the last 12 months. Per-share earnings are expected to increase 2.7% to US$0.97. Before this earnings report, the analysts had been forecasting revenues of US$3.57b and earnings per share (EPS) of US$1.04 in 2024. The analysts seem to have become a little more negative on the business after the latest results, given the minor downgrade to their earnings per share numbers for next year.
It might be a surprise to learn that the consensus price target was broadly unchanged at US$19.70, with the analysts clearly implying that the forecast decline in earnings is not expected to have much of an impact on valuation. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. There are some variant perceptions on Gates Industrial, with the most bullish analyst valuing it at US$26.00 and the most bearish at US$14.00 per share. 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.
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. We would highlight that revenue is expected to reverse, with a forecast 0.2% annualised decline to the end of 2024. That is a notable change from historical growth of 4.1% 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 3.6% per year. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Gates Industrial 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 Gates Industrial. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting that it's tracking in line with expectations. Although our data does suggest that Gates Industrial's revenue is expected to perform worse 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.
With that in mind, we wouldn't be too quick to come to a conclusion on Gates Industrial. Long-term earnings power is much more important than next year's profits. We have estimates - from multiple Gates Industrial analysts - going out to 2026, and you can see them free on our platform here.
Even so, be aware that Gates Industrial is showing 1 warning sign in our investment analysis , you should know about...
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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.
