Earnings Report: Gesco SE Missed Revenue Estimates By 6.8%

Investors in Gesco SE (ETR:GSC1) had a good week, as its shares rose 5.6% to close at €14.15 following the release of its first-quarter results. Revenues came in 6.8% below expectations, at €121m. Statutory earnings per share were relatively better off, with a per-share profit of €0.96 being roughly in line with analyst estimates. 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.

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Taking into account the latest results, the consensus forecast from Gesco's five analysts is for revenues of €519.9m in 2026. This reflects an okay 2.9% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to grow 19% to €1.52. Yet prior to the latest earnings, the analysts had been anticipated revenues of €522.0m and earnings per share (EPS) of €1.45 in 2026. So the consensus seems to have become somewhat more optimistic on Gesco's earnings potential following these results.

View our latest analysis for Gesco

The consensus price target was unchanged at €23.22, implying that the improved earnings outlook is not expected to have a long term impact on value creation for shareholders. 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. The most optimistic Gesco analyst has a price target of €29.00 per share, while the most pessimistic values it at €17.00. 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 Gesco 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. For example, we noticed that Gesco's rate of growth is expected to accelerate meaningfully, with revenues forecast to exhibit 3.8% growth to the end of 2026 on an annualised basis. That is well above its historical decline of 0.3% a year over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenue grow 6.4% per year. Although Gesco's revenues are expected to improve, it seems that the analysts are still bearish on the business, forecasting it to grow slower than the broader 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 Gesco following these results. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting that it's tracking in line with expectations. Although our data does suggest that Gesco'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.

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 forecasts for Gesco going out to 2028, and you can see them free on our platform here.

It might also be worth considering whether Gesco's debt load is appropriate, using our debt analysis tools on the Simply Wall St platform, here.

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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.