Results: Empresa Nacional de Telecomunicaciones S.A. Exceeded Expectations And The Consensus Has Updated Its Estimates

As you might know, Empresa Nacional de Telecomunicaciones S.A. (SNSE:ENTEL) just kicked off its latest quarterly results with some very strong numbers. The company beat both earnings and revenue forecasts, with revenue of CL$596b, some 9.3% above estimates, and statutory earnings per share (EPS) coming in at CL$148, 130% ahead of expectations. 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.

Check out our latest analysis for Empresa Nacional de Telecomunicaciones

Following last week's earnings report, Empresa Nacional de Telecomunicaciones' eight analysts are forecasting 2021 revenues to be CL$2.30t, approximately in line with the last 12 months. Statutory earnings per share are expected to tumble 30% to CL$342 in the same period. Yet prior to the latest earnings, the analysts had been anticipated revenues of CL$2.23t and earnings per share (EPS) of CL$278 in 2021. There's been a pretty noticeable increase in sentiment, with the analysts upgrading revenues and making a massive increase in earnings per share in particular.

Althoughthe analysts have upgraded their earnings estimates, there was no change to the consensus price target of CL$5,816, suggesting that the forecast performance does not have a long term impact on the company's valuation. 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 Empresa Nacional de Telecomunicaciones analyst has a price target of CL$7,600 per share, while the most pessimistic values it at CL$3,900. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the business.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Empresa Nacional de Telecomunicaciones' past performance and to peers in the same industry. It's pretty clear that there is an expectation that Empresa Nacional de Telecomunicaciones' revenue growth will slow down substantially, with revenues to the end of 2021 expected to display 1.7% growth on an annualised basis. This is compared to a historical growth rate of 3.0% over the past five years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 3.7% annually. Factoring in the forecast slowdown in growth, it seems obvious that Empresa Nacional de Telecomunicaciones is also expected to grow slower than other industry participants.

The Bottom Line

The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around Empresa Nacional de Telecomunicaciones' earnings potential next year. Fortunately, they also upgraded their revenue estimates, although our data indicates sales are expected to perform worse 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 in mind, we wouldn't be too quick to come to a conclusion on Empresa Nacional de Telecomunicaciones. Long-term earnings power is much more important than next year's profits. We have forecasts for Empresa Nacional de Telecomunicaciones going out to 2023, and you can see them free on our platform here.

However, before you get too enthused, we've discovered 3 warning signs for Empresa Nacional de Telecomunicaciones (1 shouldn't be ignored!) that you should be aware of.

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