Earnings Beat: CTT - Correios De Portugal, S.A. Just Beat Analyst Forecasts, And Analysts Have Been Updating Their Models

It's been a pretty great week for CTT - Correios De Portugal, S.A. (ELI:CTT) shareholders, with its shares surging 17% to €4.19 in the week since its latest annual results. It looks like a credible result overall - although revenues of €985m were what the analysts expected, CTT - Correios De Portugal surprised by delivering a (statutory) profit of €0.43 per share, an impressive 31% above what was forecast. 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. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on CTT - Correios De Portugal after the latest results.

See our latest analysis for CTT - Correios De Portugal

After the latest results, the twin analysts covering CTT - Correios De Portugal are now predicting revenues of €1.02b in 2024. If met, this would reflect a reasonable 3.4% improvement in revenue compared to the last 12 months. Statutory earnings per share are forecast to crater 42% to €0.25 in the same period. In the lead-up to this report, the analysts had been modelling revenues of €986.8m and earnings per share (EPS) of €0.31 in 2024. So it's pretty clear the analysts have mixed opinions on CTT - Correios De Portugal after the latest results; even though they upped their revenue numbers, it came at the cost of a large cut to per-share earnings expectations.

The consensus price target was unchanged at €5.54, suggesting the business is performing roughly in line with expectations, despite some adjustments to profit and revenue forecasts.

Of course, another way to look at these forecasts is to place them into context against the industry itself. It's pretty clear that there is an expectation that CTT - Correios De Portugal's revenue growth will slow down substantially, with revenues to the end of 2024 expected to display 3.4% growth on an annualised basis. This is compared to a historical growth rate of 7.4% over the past five years. Compare this to the 30 other companies in this industry with analyst coverage, which are forecast to grow their revenue at 2.8% per year. Factoring in the forecast slowdown in growth, it looks like CTT - Correios De Portugal is forecast to grow at about the same rate as 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 CTT - Correios De Portugal. There was also an upgrade to revenue estimates, although as we saw earlier, forecast growth is only expected to be about the same as 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 analyst estimates for CTT - Correios De Portugal going out as far as 2026, and you can see them free on our platform here.

Don't forget that there may still be risks. For instance, we've identified 1 warning sign for CTT - Correios De Portugal that you should be aware of.

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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.