Yahoo Finance GLOBALFOUNDRIES Inc. Just Beat Analyst Forecasts, And Analysts Have Been Updating Their Predictions
It's been a good week for GLOBALFOUNDRIES Inc. (NASDAQ:GFS) shareholders, because the company has just released its latest quarterly results, and the shares gained 6.9% to US$51.60. Revenues were US$1.5b, approximately in line with whatthe analysts expected, although statutory earnings per share (EPS) crushed expectations, coming in at US$0.24, an impressive 70% ahead of estimates. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.
Check out our latest analysis for GLOBALFOUNDRIES
Taking into account the latest results, the 16 analysts covering GLOBALFOUNDRIES provided consensus estimates of US$6.72b revenue in 2024, which would reflect a small 5.4% decline over the past 12 months. Statutory earnings per share are forecast to crater 33% to US$1.10 in the same period. Before this earnings report, the analysts had been forecasting revenues of US$6.81b and earnings per share (EPS) of US$1.03 in 2024. So the consensus seems to have become somewhat more optimistic on GLOBALFOUNDRIES' earnings potential following these results.
There's been no major changes to the consensus price target of US$60.07, suggesting that the improved earnings per share outlook is not enough to have a long-term positive impact on the stock's valuation. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. There are some variant perceptions on GLOBALFOUNDRIES, with the most bullish analyst valuing it at US$77.00 and the most bearish at US$42.00 per share. There are definitely some different views on the stock, but the range of estimates is not wide enough as to imply that the situation is unforecastable, in our view.
These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the GLOBALFOUNDRIES' past performance and to peers in the same industry. These estimates imply that revenue is expected to slow, with a forecast annualised decline of 7.1% by the end of 2024. This indicates a significant reduction from annual growth of 12% over the last three years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 17% annually for the foreseeable future. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - GLOBALFOUNDRIES is expected to lag the wider industry.
The Bottom Line
The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around GLOBALFOUNDRIES' earnings potential next year. On the plus side, there were no major changes to revenue estimates; although forecasts imply they will 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.
Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have estimates - from multiple GLOBALFOUNDRIES analysts - going out to 2026, and you can see them free on our platform here.
Even so, be aware that GLOBALFOUNDRIES 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.
