Earnings Beat: National Central Cooling Company PJSC Just Beat Analyst Forecasts, And Analysts Have Been Updating Their Models

National Central Cooling Company PJSC (DFM:TABREED) came out with its full-year results last week, and we wanted to see how the business is performing and what industry forecasters think of the company following this report. The result was positive overall - although revenues of د.إ1.7b were in line with what the analysts predicted, National Central Cooling Company PJSC surprised by delivering a statutory profit of د.إ0.20 per share, modestly greater than expected. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. 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 National Central Cooling Company PJSC

Taking into account the latest results, the current consensus from National Central Cooling Company PJSC's twin analysts is for revenues of د.إ1.95b in 2021, which would reflect a meaningful 12% increase on its sales over the past 12 months. Per-share earnings are expected to increase 4.7% to د.إ0.20. Before this earnings report, the analysts had been forecasting revenues of د.إ1.90b and earnings per share (EPS) of د.إ0.19 in 2021. So there seems to have been a moderate uplift in sentiment following the latest results, given the upgrades to both revenue and earnings per share forecasts for next year.

Althoughthe analysts have upgraded their earnings estimates, there was no change to the consensus price target of د.إ2.92, suggesting that the forecast performance does not have a long term impact on the company's valuation.

One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. It's clear from the latest estimates that National Central Cooling Company PJSC's rate of growth is expected to accelerate meaningfully, with the forecast 12% revenue growth noticeably faster than its historical growth of 6.3%p.a. over the past five years. Other similar companies in the industry (with analyst coverage) are also forecast to grow their revenue at 11% per year. National Central Cooling Company PJSC is expected to grow at about the same rate as its industry, so it's not clear that we can draw any conclusions from its growth relative to competitors.

The Bottom Line

The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around National Central Cooling Company PJSC's earnings potential next year. They also upgraded their revenue forecasts, although the latest estimates suggest that National Central Cooling Company PJSC will grow in line with the overall 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. At least one analyst has provided forecasts out to 2023, which can be seen for free on our platform here.

Even so, be aware that National Central Cooling Company PJSC is showing 1 warning sign in our investment analysis , you should know about...

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