Analysts Have Just Cut Their Endesa, S.A. (BME:ELE) Revenue Estimates By 6.8%

Today is shaping up negative for Endesa, S.A. (BME:ELE) shareholders, with the analysts delivering a substantial negative revision to this year's forecasts. This report focused on revenue estimates, and it looks as though the consensus view of the business has become substantially more conservative.

Following this downgrade, Endesa's 17 analysts are forecasting 2024 revenues to be €24b, approximately in line with the last 12 months. Per-share earnings are expected to bounce 287% to €1.61. Previously, the analysts had been modelling revenues of €25b and earnings per share (EPS) of €1.60 in 2024. So it looks like the analysts have become a bit less optimistic after the latest consensus updates announcement, with revenues expected to fall even as the company is supposed to maintain EPS.

Check out our latest analysis for Endesa

The average price target was steady at €21.16 even though revenue estimates declined; likely suggesting the analysts place a higher value on earnings.

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. We would highlight that Endesa's revenue growth is expected to slow, with the forecast 3.7% annualised growth rate until the end of 2024 being well below the historical 11% p.a. growth over the last five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 1.5% annually. So it's pretty clear that, while Endesa's revenue growth is expected to slow, it's still expected to grow faster than the industry itself.

The Bottom Line

The most obvious conclusion from this consensus update is that there's been no major change in the business' prospects in recent times, with analysts holding earnings per share steady, in line with previous estimates. While analysts did downgrade their revenue estimates, these forecasts still imply revenues will perform better than the wider market. Given the stark change in sentiment, we'd understand if investors became more cautious on Endesa after today.

After a downgrade like this, it's pretty clear that previous forecasts were too optimistic. What's more, we've spotted several possible issues with Endesa's business, like its declining profit margins. Learn more, and discover the 3 other flags we've identified, for free on our platform here.

Another way to search for interesting companies that could be reaching an inflection point is to track whether management are buying or selling, with our free list of growing companies backed by insiders.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com