Terna – Rete Elettrica Nazionale Società per Azioni (BIT:TRN) shareholders are probably feeling a little disappointed, since its shares fell 4.1% to €5.54 in the week after its latest quarterly results. It was an okay result overall, with revenues coming in at €568m, roughly what the analysts had been expecting. 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. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.
After the latest results, the twelve analysts covering Terna – Rete Elettrica Nazionale Società per Azioni are now predicting revenues of €2.42b in 2020. If met, this would reflect an okay 4.2% improvement in sales compared to the last 12 months. Statutory per share are forecast to be €0.38, approximately in line with the last 12 months. In the lead-up to this report, the analysts had been modelling revenues of €2.42b and earnings per share (EPS) of €0.38 in 2020. The consensus analysts don’t seem to have seen anything in these results that would have changed their view on the business, given there’s been no major change to their estimates.
There were no changes to revenue or earnings estimates or the price target of €5.98, suggesting that the company has met expectations in its recent result. 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 Terna – Rete Elettrica Nazionale Società per Azioni analyst has a price target of €6.80 per share, while the most pessimistic values it at €5.20. Still, with such a tight range of estimates, it suggeststhe analysts have a pretty good idea of what they think the company is worth.
These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Terna – Rete Elettrica Nazionale Società per Azioni’s past performance and to peers in the same industry. Next year brings more of the same, according to the analysts, with revenue forecast to grow 4.2%, in line with its 3.8% annual growth over the past five years. Compare this with the wider industry, which analyst estimates (in aggregate) suggest will see revenues grow 4.6% next year. So although Terna – Rete Elettrica Nazionale Società per Azioni is expected to maintain its revenue growth rate, it’s only growing at about the rate of 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. Happily, there were no real changes to sales forecasts, with the business still expected to grow in line with the overall industry. The consensus price target held steady at €5.98, with the latest estimates not enough to have an impact on their price targets.
With that in mind, we wouldn’t be too quick to come to a conclusion on Terna – Rete Elettrica Nazionale Società per Azioni. Long-term earnings power is much more important than next year’s profits. We have estimates – from multiple Terna – Rete Elettrica Nazionale Società per Azioni analysts – going out to 2024, and you can see them free on our platform here.
It is also worth noting that we have found 2 warning signs for Terna – Rete Elettrica Nazionale Società per Azioni (1 makes us a bit uncomfortable!) that you need to take into consideration.
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