Earnings Release: Here's Why Analysts Cut Their TF1 SA (EPA:TFI) Price Target To €7.20
Last week saw the newest third-quarter earnings release from TF1 SA (EPA:TFI), an important milestone in the company's journey to build a stronger business. TF1 reported in line with analyst predictions, delivering revenues of €461m and statutory earnings per share of €0.72, suggesting the business is executing well and in line with its plan. 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.
Following last week's earnings report, TF1's five analysts are forecasting 2027 revenues to be €2.15b, approximately in line with the last 12 months. Statutory earnings per share are expected to fall 15% to €0.41 in the same period. In the lead-up to this report, the analysts had been modelling revenues of €2.18b and earnings per share (EPS) of €0.43 in 2027. The analysts seem to have become a little more negative on the business after the latest results, given the small dip in their earnings per share numbers for next year.
View our latest analysis for TF1
It might be a surprise to learn that the consensus price target fell 7.3% to €7.20, with the analysts clearly linking lower forecast earnings to the performance of the stock price. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. The most optimistic TF1 analyst has a price target of €8.40 per share, while the most pessimistic values it at €6.50. Even so, with a relatively close grouping of estimates, it looks like the analysts are quite confident in their valuations, suggesting TF1 is an easy business to forecast or the the analysts are all using similar assumptions.
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. It's also worth noting that the years of declining revenue look to have come to an end, with the forecast stauing flat to the end of 2027. Historically, TF1's top line has shrunk approximately 2.1% annually over the past five years. Compare this against analyst estimates for the broader industry, which suggest that (in aggregate) industry revenues are expected to grow 2.4% annually. Although TF1's revenues are expected to improve, it seems that it is still expected to grow slower than the wider industry.
The Bottom Line
The most important thing to take away is that the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. On the plus side, there were no major changes to revenue estimates; although forecasts imply they will perform worse than the wider industry. 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.
With that in mind, we wouldn't be too quick to come to a conclusion on TF1. Long-term earnings power is much more important than next year's profits. We have estimates - from multiple TF1 analysts - going out to 2028, and you can see them free on our platform here.
Plus, you should also learn about the 3 warning signs we've spotted with TF1 (including 2 which are a bit unpleasant) .
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