Results: Grupo México, S.A.B. de C.V. Beat Earnings Expectations And Analysts Now Have New Forecasts
Grupo México, S.A.B. de C.V. (BMV:GMEXICOB) just released its third-quarter report and things are looking bullish. Grupo México. de beat earnings, with revenues hitting US$6.3b, ahead of expectations, and statutory earnings per share outperforming analyst reckonings by a solid 12%. 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. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Grupo México. de after the latest results.
Following last week's earnings report, Grupo México. de's 15 analysts are forecasting 2027 revenues to be US$23.0b, approximately in line with the last 12 months. Statutory earnings per share are expected to dip 2.4% to US$0.87 in the same period. In the lead-up to this report, the analysts had been modelling revenues of US$22.4b and earnings per share (EPS) of US$0.80 in 2027. So there seems to have been a moderate uplift in sentiment following the latest results, given the upgrades to both revenue and earnings per share forecasts for next year.
View our latest analysis for Grupo México. de
Althoughthe analysts have upgraded their earnings estimates, there was no change to the consensus price target of Mex$236, suggesting that the forecast performance does not have a long term impact on the company's valuation. 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 Grupo México. de analyst has a price target of Mex$305 per share, while the most pessimistic values it at Mex$45.34. We would probably assign less value to the analyst forecasts in this situation, because such a wide range of estimates could imply that the future of this business is difficult to value accurately. With this in mind, we wouldn't rely too heavily the consensus price target, as it is just an average and analysts clearly have some deeply divergent views on the business.
Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. We would highlight that Grupo México. de's revenue growth is expected to slow, with the forecast 0.8% annualised growth rate until the end of 2027 being well below the historical 8.2% p.a. growth over the last five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 2.0% per year. Factoring in the forecast slowdown in growth, it seems obvious that Grupo México. de is also expected to grow slower than other industry participants.
The Bottom Line
The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around Grupo México. de's earnings potential next year. Fortunately, they also upgraded their revenue estimates, although our data indicates it is expected to perform worse than the wider industry. The consensus price target held steady at Mex$236, 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 Grupo México. de going out to 2028, and you can see them free on our platform here..
It is also worth noting that we have found 3 warning signs for Grupo México. de (1 shouldn't be ignored!) that you need to take into consideration.
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