Enefit Green AS (TAL:EGR1T) Reported Earnings Last Week And Analysts Are Already Upgrading Their Estimates

Investors in Enefit Green AS (TAL:EGR1T) had a good week, as its shares rose 2.0% to close at €4.41 following the release of its annual results. Enefit Green reported in line with analyst predictions, delivering revenues of €257m and statutory earnings per share of €0.42, suggesting the business is executing well and in line with its plan. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.

See our latest analysis for Enefit Green

Following the latest results, Enefit Green's three analysts are now forecasting revenues of €301.2m in 2023. This would be a meaningful 17% improvement in sales compared to the last 12 months. Statutory earnings per share are predicted to swell 18% to €0.49. Yet prior to the latest earnings, the analysts had been anticipated revenues of €274.9m and earnings per share (EPS) of €0.38 in 2023. So it seems there's been a definite increase in optimism about Enefit Green's future following the latest results, with a very substantial lift in the earnings per share forecasts in particular.

With these upgrades, we're not surprised to see that the analysts have lifted their price target 7.1% to €5.03per share. 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 Enefit Green at €5.20 per share, while the most bearish prices it at €4.90. Even so, with a relatively close grouping of estimates, it looks like the analysts are quite confident in their valuations, suggesting Enefit Green is an easy business to forecast or the the analysts are all using similar assumptions.

Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. It's pretty clear that there is an expectation that Enefit Green's revenue growth will slow down substantially, with revenues to the end of 2023 expected to display 17% growth on an annualised basis. This is compared to a historical growth rate of 22% over the past three years. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 0.7% per year. So it's pretty clear that, while Enefit Green's revenue growth is expected to slow, it's still expected to grow faster than the industry itself.

The Bottom Line

The most important thing here is that the analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards Enefit Green following these results. Pleasantly, they also upgraded their revenue estimates, and their forecasts suggest the business is expected to grow faster than the wider industry. There was also a nice increase in the price target, with the analysts clearly feeling that the intrinsic value of the business is improving.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have estimates - from multiple Enefit Green analysts - going out to 2025, and you can see them free on our platform here.

And what about risks? Every company has them, and we've spotted 1 warning sign for Enefit Green you should know about.

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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.