Emirates NBD Bank PJSC Just Missed Revenue By 30%: Here's What Analysts Think Will Happen Next

As you might know, Emirates NBD Bank PJSC (DFM:EMIRATESNBD) last week released its latest annual, and things did not turn out so great for shareholders. Earnings overall missed expectations, with revenue falling 30% short of analyst estimates, at د.إ17b. Statutory earnings per share were د.إ1.00, 3.7% shy of estimates. 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. 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 Emirates NBD Bank PJSC

Following the latest results, Emirates NBD Bank PJSC's eight analysts are now forecasting revenues of د.إ25.0b in 2021. This would be a major 49% improvement in sales compared to the last 12 months. Statutory earnings per share are predicted to shoot up 29% to د.إ1.47. Before this earnings report, the analysts had been forecasting revenues of د.إ23.9b and earnings per share (EPS) of د.إ1.28 in 2021. So it seems there's been a definite increase in optimism about Emirates NBD Bank PJSC's future following the latest results, with a substantial gain in the earnings per share forecasts in particular.

Althoughthe analysts have upgraded their earnings estimates, there was no change to the consensus price target of د.إ12.65, suggesting that the forecast performance does not have a long term impact on the company's valuation. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. Currently, the most bullish analyst values Emirates NBD Bank PJSC at د.إ16.00 per share, while the most bearish prices it at د.إ10.65. These price targets show that analysts do have some differing views on the business, but the estimates do not vary enough to suggest to us that some are betting on wild success or utter failure.

Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. The analysts are definitely expecting Emirates NBD Bank PJSC's growth to accelerate, with the forecast 49% growth ranking favourably alongside historical growth of 14% per annum over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 7.2% per year. Factoring in the forecast acceleration in revenue, it's pretty clear that Emirates NBD Bank PJSC is expected to grow much faster than its industry.

The Bottom Line

The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around Emirates NBD Bank PJSC's earnings potential next year. Happily, they also upgraded their revenue estimates, and are forecasting revenues to grow faster 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.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have forecasts for Emirates NBD Bank PJSC going out to 2024, and you can see them free on our platform here.

It might also be worth considering whether Emirates NBD Bank PJSC's debt load is appropriate, using our debt analysis tools on the Simply Wall St platform, here.

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This article by Simply Wall St is general in nature. 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.
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