Elia Group SA/NV Just Missed Earnings And Its Revenue Numbers Were Weaker Than Expected

As you might know, Elia Group SA/NV (EBR:ELI) last week released its latest yearly, and things did not turn out so great for shareholders. It looks like a weak result overall, with both revenues and earnings falling well short of analyst predictions. Revenues of €3.8b missed by 11%, and statutory earnings per share of €4.41 fell short of forecasts by 2.2%. 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. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

View our latest analysis for Elia Group

Taking into account the latest results, the consensus forecast from Elia Group's seven analysts is for revenues of €4.68b in 2024. This reflects a substantial 22% improvement in revenue compared to the last 12 months. Per-share earnings are expected to climb 11% to €4.90. Before this earnings report, the analysts had been forecasting revenues of €4.92b and earnings per share (EPS) of €4.90 in 2024. So it looks like the analysts have become a bit less optimistic after the latest results announcement, with revenues expected to fall even as the company is supposed to maintain EPS.

The average price target was steady at €124even though revenue estimates declined; likely suggesting the analysts place a higher value on earnings. 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. The most optimistic Elia Group analyst has a price target of €141 per share, while the most pessimistic values it at €94.30. 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.

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. The analysts are definitely expecting Elia Group's growth to accelerate, with the forecast 22% annualised growth to the end of 2024 ranking favourably alongside historical growth of 15% per annum over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 0.02% annually. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect Elia Group to grow faster than the wider industry.

The Bottom Line

The most important thing to take away is that there's been no major change in sentiment, with the analysts reconfirming that the business is performing in line with their previous earnings per share estimates. Regrettably, they also downgraded their revenue estimates, but the latest forecasts still imply the business will grow faster than the wider industry. Even so, long term profitability is more important for the value creation process. 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.

With that in mind, we wouldn't be too quick to come to a conclusion on Elia Group. Long-term earnings power is much more important than next year's profits. We have estimates - from multiple Elia Group analysts - going out to 2026, and you can see them free on our platform here.

You should always think about risks though. Case in point, we've spotted 2 warning signs for Elia Group 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.